Indirectly, syndication is related to
products. A product is a service to customers – and ultimately
without syndication the vendor finance service would dry up.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The reason for this is simple: the level of
risk lessors are willing to take on vendor finance is getting
smaller, while the amount of lending needed by customers is
growing. Therefore, lessors increasingly need to syndicate in order
to resolve these conflicting forces.
John Bennett, managing director of Global
Vendor Finance (EMEA) and also chairman of Leaseurope, reflects
this view when he says syndication of individual leases and mini
portfolios “is being used increasingly by bank owned lessors to
manage their credit exposure to individual customers, while
maintaining their customer-vendor relationship”.
This is not the case with all large lenders –
in fact several, including HSBC Equipment Finance, say they never
syndicate, and only take all the risk on a deal themselves or do
not lend at all.
So much for syndication, but how are the lease
securitisation and asset backed security (ABS) markets faring?
Standard & Poor’s say this market has all but disappeared
following a flurry of ABS deals three years ago – mainly in Italy –
and a spate of securitisations that only really ground to a halt a
few months ago. This was only after Raiffeisen Leasing, Banca
Italease and Eurolease Auto managed to sneak in some cheeky
securitisations just before the recession started earlier this
year.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe likelihood, though, is that
securitisations will re-start as soon as the market picks up again.
After all, getting assets off the balance sheet and improving loan
to reserve ratios will be more important than ever as regulators
take closer looks at lease books.
Meanwhile, some hope ABS – involving the
pooling of different asset classes into an investment structure –
will enter the European lease markets. The forward thinkers in
asset finance are thinking so, too.
