In the emerging markets at the edges of Europe, 2011 did not generate much excitement for global structured finance players; many of the deals that did go cross-border were purchased by multilateral banks. This is understandable given the crisis engulfing their neighbors.
But Stefan Bund, managing director in WestLB’s securitization group, said he was bullish on the prospects for Turkey and Russia in 2012. “The global shift toward secured funding is hitting EM, and therefore structured finance is becoming an important tool,” he added.
The problem for some cross-border asset classes – such as DPRs out of Turkey – has been that issuers and investors are unable to agree on pricing. In addition, the extreme volatility has kept international buy-siders clinging to only the safest U.S. and European products. At any rate, some $1.9 billion in Turkish DPR deals were issued in 2011.
Domestically, Turkey is likely to build on debuts made in 2011: pension-deductible consumer assets and covered bonds, Bund said. But he questioned the appetite of local investors for those products.
Domestically, Russia is likely to stay the course with its RMBS. There was roughly RUR46.4 billion ($1.4 billion) of RMBS issued in the country in 2011, with nearly half attributed to the government-owned Agency for Housing Mortgage Lending (AHML).
