European auto loan ABS bonds have long had the attractive characteristics of strong fundamentals, fast de-levering, likely upgrade potential, and short spread duration.
In recent times an increase in supply has made the asset class even more appealing, with wider spreads and more deals to choose from. Technical opportunities such as this typically offer strong risk-adjusted value and now that supply/demand has re-balanced, we believe it’s an attractive entry point for Auto ABS across our strategies.