Beyond Plain Vanilla Securitizations – Variety Invigorates the European Structured Finance Market

Today’s European securitization market is growing beyond the plain vanilla of RMBS and auto loans. CSC’s EMEA team was recently involved in two innovative deals: Europe’s first data center securitization, and the first European public residential solar asset-back securitization. Boudewijn Thus, head of Sales EMEA, CSC and Arno Vink, global managing director EMEA, explain how variety is the spice of life in today’s European structured finance market.

How do you look back on this past year?

Boudewijn Thus: We had a very good year in Europe, particularly in Belgium and the Netherlands where we’ve been able to generate opportunities and lay the foundation for further growth. In the second half of last year, we were mandated on a number of deals that are currently in the pipeline, so we reflect back on a good year and look forward to 2025 with optimism. Also, we have seen high demand for a wide variety of our services beyond our traditional role in residential mortgage-backed securities (RMBS) and car loan securitization transactions.

What were the deals which spring to mind?

Arno Vink: We were privileged to support two innovative transactions which were both celebrated last year. These were the first EMEA data center securitization as well as the first European public residential solar asset-backed securitization. The data center receivables transaction was on behalf of Vantage Data Centers in Jersey, which is a major global provider of large data center campuses. The solar deal was on behalf of Enpal, which is Europe’s leading solar energy company and Germany’s leading heat pump installer.

Boudewijn Thus: We’re proud of CSC’s role in these ground-breaking deals, and see a lot of future potential in both solar and data center receivables. We hope to play a similar role in future transactions and share our knowledge and support customers in this specialized area. This is especially important as the energy transition demands financing to succeed, and Europe’s data center market is growing extremely rapidly. I think both renewable energy and data center securitizations are new asset classes we will see more of in the future.

Were you involved in any other noteworthy transactions?

Arno Vink:  We were heavily involved in a Dutch private credit transaction which received considerable attention in the market. In November we helped securitize the lease receivables of Beequip, the Netherlands’ largest alternative financier of heavy earthmoving equipment. Beequip was sold to New-York based private equity giant Apollo Global Management which has some $696 billion of assets under management by Dutch bank NIBC.  It was a very high-profile deal in which we were able to showcase our experience in the field of securitization, private equity, and private credit.

Why is that particular market opening up?

Boudewijn Thus: Traditional banks continue to retreat from the market, and companies still need to attract funding. Private credit and private equity are helping take over the banks’ role. There is an increasing demand for assets and receivables to be financed. It’s simple supply and demand.

What is the difference between private equity and private credit?

Arno Vink: In the private credit market, investors make loans to businesses that cannot gain finance from banks or the public market. Private equity takes an ownership share in companies which are not traded on the public markets. We often become involved when deals are refinanced in the capital markets in structures that are segregated from the balance sheet of the originators. And we see a lot of demand for these loan agency services.

What other services do you see gaining momentum?

Arno Vink: One small but growing service allied to our involvement in car lease transactions is data custody. Being a data trustee is similar to our escrow offering with cash. Instead of being a custodian for cash (escrow) we are a custodian of data. We have the team and the infrastructure, and it is relatively simple for us to set up. This is by no means a major service right now, but it’s an interesting new field for us, as traditional notaries and law firms don’t have the infrastructure or IT platforms to facilitate the service.

Boudewijn Thus: We are also seeing an increase in demand for our agency products, after we recently transferred a considerable portfolio of security agents and facility agent transactions (primarily in the healthcare sector) from a major Dutch bank. Also, there is a rising interest in the energy decommissioning sector, due to the freeing up of carbon credits that results from those transactions. These are essentially all spin-offs from our traditional role in securitizations, but the landscape is becoming more varied, and we can be proud of a very well-stocked pipeline for the foreseeable future!