2022 European ABS Outlook

Overall, we remain constructive on the European asset-backed securities (ABS) market. In the higher and more volatile interest rate environment that we expect in 2022 floating-rate assets should prove resilient. The fundamental backdrop is very strong in consumer ABS and is stable and improving in CLOs, limiting the credit risk faced by investors. We continue to favor sectors which are ineligible for the European Central Bank’s (ECB) asset-purchase programs, as we believe these offer exceptional relative value across all levels of credit risk.