< The 2014 All-Europe Fixed-Income Research Team
Conor O’Toole and his Deutsche Bank crew leap from runner-up to capture the No. 2 position in just their second appearance on the roster. European asset-backed securities will enjoy a strong market this year, the London-based strategists forecast. “We expect spreads to tighten further in 2014,” says O’Toole, “driven by a continued search for yield and a shrinking investable universe.” New issuance of a projected €80 billion ($108 billion) this year, little changed from the €75 billion seen in 2013, will continue pumping momentum into the markets, he notes, which could extend to the region’s peripheral countries if macro conditions maintain their current course. But even given Europe’s economic recovery, the analysts believe that regional credit performance will continue to reflect the gap between gains made by core versus peripheral nations, with the debt of more developed nations maintaining a steady status quo and that of their smaller counterparts continuing to vary from stability to deterioration. Top recommendations for 2014 include senior bonds that can move toward vanilla pricing, such as top-tier leveraged-loan collateralized loan obligations and U.K. nonconforming CLOs, which additionally will benefit from their exposure to Britain’s rallying housing market. Clients appreciate the comprehensive coverage provided by the Deutsche team, whose analysts are “highly accessible and responsive,” as one backer says. |