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Is European securitisation on the eve of a renaissance?

Foto van Christian Thun, CEO, European DataWarehouse

Christian Thun, CEO, European DataWarehouse

“The winds of change are blowing through Europe’s securitisation market,” says Dr Christian Thun, CEO of the Frankfurt-based European DataWarehouse. He sees positive years ahead as authoritative voices indicate that not only is investment in innovation crucial, but securitisation may also well be part of the answer to finance Europe’s next phase of development.

How does today’s European securitisation landscape look?

The regulatory mindset in Europe appears to be changing which is big news for us. Policymakers and central bankers now view securitisation as a very valuable tool, as they should in my view. There appears to be a lot of positive political momentum in favour of this financial instrument. Christine Lagarde, President of the ECB, specifically mentioned securitisation in a late 2023 speech in Frankfurt. That was also when she signalled the “Kantian shift” towards the idea of an EU Capital Markets Union. Then came, the Noyer Report in April 2024 and the Draghi Report in September 2024 which also explicitly mentioned securitisation and finally the targeted Consultation on the securitisation framework published by the EU Commission in October 2024, which ran until early December 2024. All these signs point to a “wind of change” blowing through Europe’s securitisation industry.

Do you welcome this development?

Absolutely! This positive attitude towards securitisation contrasts sharply with the previous neutral, or sometimes, negative attitude of previous years. We have seen the market changing as a result, with more issuers and an increase in issuances in 2024. Europe’s first public solar ABS in October perhaps symbolized this new wave of market optimism and innovation. The Berlin-based energy transition start-up Enpal’s Golden Ray 1 offering was backed by 8,500 residential solar systems. At €240 mln, it immediately put Enpal at the forefront of Europe’s renewable energy financing.

Did this deal spark market interest for EDW’s services?

Certainly. Both potential new issuers and curious investors have reached out to us. There is more interest in the market for securitisation as a product, both as a financing tool and as an asset.

Were there other landmarks in 2024 for EDW?

We were very proud to win the 2024 GlobalCapital Award for the Best Data Provider of the Year during the European Securitization Awards. The award is a real credit to our team. Even though we are a relatively small company we were recognized as being the best. To see European Data Warehouse going toe-to-toe with high-profile global competitors is always an honour.  In 2024, we also expanded our global footprint with customers as far away as Australia. Thanks to the Australian Securitisation Federation, we now help Australian issuers gain access to the European market.

You have a PhD in Artificial Intelligence: is EDW incorporating AI into its offering?

Of course! We launched a new data usage portal in October 2024 which includes an AI assistant to extract data based on customer queries. My PhD was 25 years ago, by the way, but I do like to keep up to date on the subject and EDW rapidly rolled out this new service thanks to our company’s agility. The system immediately extracts data using queries written in everyday language. You can pose it a question, for example: “what is the most popular car in France?” or “How much do pensioners pay on average for houses in Northern Italy?” The system then populates the SQL code, runs the query it and gives you the answer. The aim is to simplify the interface, and everyone can extract results in the blink of an eye, instead of having to wait for someone else to write the code and access the data. This is especially interesting for, for example, investors who invest in one or two deals a year, and who want to run some due diligence by comparing delinquencies or performance of Dutch mortgages compared with other territories within a matter of minutes. We offer this service to all our clients.

During the Securitisation Event you will discuss the proposed Capital Markets Union, does EDW have an opinion on how this could potentially transform the securitisation market?

Centralization and synchronization are key elements of the proposed Capital Markets Union. Part of the CMU idea as I understand it is to facilitate more access to financing by facilitating cross-border lending. So rather than the CMU stimulating the European securitisation market, I believe in order for the CMU to be a success it is extremely important for a strong securitisation market to be in place. A cross-border debt synchronization where, for example, German or Spanish SMEs loans could be pooled, securitised, and sold to investors could form a very interesting financial instrument.

Do you think the CMU will happen?

That is of course the million-euro question. We are currently awaiting the results of the Commission’s consultation that ended in December, which appeared to put over 150 issues under discussion from disclosure to capital requirements verification and beyond. This is our industry’s one chance to respond and for the European Commission to rectify. Transparency and disclosure are likely relatively simple to address, however capital requirements would be more complex in the context of Basel III. However, I am convinced that if the Commission gets it right and irons out some of the complexities of the Level Two and hopefully Level One texts by, say end-2026 that could make European securitisations a much more attractive tool. Everybody knows that investors always seek good opportunities to invest their capital, and that securitisation can help fund such opportunities in the energy, digital and economic transition of the continent. The ball is firmly in the EU Commission’s court. I hope we see more niche asset classes such as solar ABS and data center ABS becoming mainstream.

What is stopping the European Commission on this?

Europe does not have much time to unlock our financing opportunities. We need to be more competitive in order to provide the funding that is needed. However, Europe is not known for its speed. We are nevertheless an aging continent with several trillion euros in savings which could potentially be funneled into investments. Also, Europe must invest in modernization. The modernization of the defense industry, as well as physical and digital infrastructure could all benefit from a more flexible and unified securitisation market. Considering this new energy among legislators on securitisation I am personally very upbeat looking towards the rest of 2025 and beyond.

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