Russian Invasion of Ukraine Brings New Challenges for European Securitisation

In this commentary, we look at tightening monetary policies, higher inflation, and lower expectation of GDP growth in Europe as some of the factors with negative implications for consumers, with declining debt affordability and increased uncertainty for the corporate sector. We see some trends emerging in European structured finance subsectors where the indirect effect of the Russian invasion of Ukraine could be uneven, depending on the relevant sectors and jurisdictions.

“In DBRS Morningstar’s rated structured finance and covered bonds universe in Europe, we currently have no exposure to Russia or Ukraine or to the most affected sectors and therefore do not expect any sharp, immediate change in the credit quality of the transactions and programmes we rate”, said Mudasar Chaudhry, Head of European Structured Finance Research.