Plenty of Good Cheer as Canadian ABS Industry Convenes in NOTL
Insight Information recently held the 13th Annual ABS 2010 Canadian Structured Finance Forum from Sunday, June 6 to Tuesday, June 8, 2010 at Queen's Landing in Niagara-on-the-Lake, Ontario. Mark McElheran moderated a panel entitled "Evolution of Product Distribution: Private Placements" in which Mark put to a panel of market participants the thoughts presented in the analysis piece co-authored by Doug Klaassen, Mark and David Allan and posted here last week . These other panelists included Yatendra Killer of Honda Canada Finance Inc., Marie-Claude Morrissette of Nissan Canada Inc. and Jonathan Zamir of Bank of America Merrill Lynch.
There were over 250 delegates in attendance. While this number was down significantly from the pre-credit crunch days, this was a significant increase from the attendance at the 2009 conference held in Banff, Alberta. The fact that Niagara-on-the-Lake is an hour's drive from the Toronto airport didn't hurt given the significant number of attendees arriving from Toronto and New York (and other more or less exotic locales), nor did the myriad of opportunities for various tours and receptions in the surrounding wineries. There was a significant amount of optimism in the air and the mood of the conference was surely brighter than it has been the last few years (and this was the case even before the cocktails were poured!). While perhaps not as engaging as the nearby Shaw Festival, the sessions were surprisingly well attended given the warm and sunny weather that graced the conference (which stood in stark contrast to the unpredictable (and largely soggy) weather that veterans of the conference have experienced for years in Banff and Whistler).
One theme that emanated from the sessions and from discussions with various attendees is that there are signs of life emerging in the ABCP conduit market which has been largely dormant (and shrinking) since the end of 2007. This being said, a number of conduit sponsors observed that there is a scarcity of quality securitizible assets in the marketplace - perhaps the adage "once burned twice shy" would be an apt description for the behaviour of issuers that suffered from a scarcity of securitization capacity during the credit crisis. In addition to the scarcity of supply, those assets which are available are being chased not only by conduit sponsors but also by the term private placement market which has been steadily growing since the end of 2007. Nonetheless, given the very strong historical performance of Canadian ABS, it is hoped that issuers (and more investors) will return to the fold as the industry continues to renew itself. But before we leave everyone with the impression that it is all smooth sailing and sunny skies in the forecast, there were those sessions on Basel III and IFRS which temper the expectations of many and point towards a somewhat unsettled forecast for the future of the Canadian ABS market.
