Financial Vehicle Corporation Statistics Q2 2015

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Total FVC asset values continued to increase during Q2 2015 to €418.9bn, despite a slight drop in FVC numbers. The Irish share of euro area FVC assets increased to its highest level since Q3 2011.

In Q2 2015, the total value of FVC assets increased by €3.9 billion to €418.9 billion, arising from transactions of €11 billion and revaluations of minus €7.1 billion (Chart 1). Inflows were mainly driven by increases of €5.6 billion, €3.2 billion, and €1.5 billion in deposit and loan claims, other assets, and other securitised assets, respectively. The sizeable negative revaluation was largely due to a fall in the value of forward contracts due to currency fluctuations.

This is the third consecutive quarter of growth in FVC asset values (Chart 2). This indicates that the Irish FVC industry is showing signs of stabilisation as investors seek higher yielding assets in the continued low yield environment. Despite this, FVC reporting numbers fell slightly over the quarter as a number of smaller vehicles were wound down, mainly consumer and corporate asset backed type vehicles.

Euro area FVC asset values did not mirror the Irish performance in Q2 2015. During the quarter, euro area assets fell by €22 billion to €1,805 billion, mainly driven by outflows from securitised loans of €18.6 billion. This decline helped to increase Ireland’s share of euro area assets from 22.7% in Q1 2015 to 23.2% in Q2 2015 (Chart 3), with Ireland remaining as one of the favourite jurisdictions in the euro area for the incorporation of FVCs.

Notes:

These data were collected under the requirements of Regulation (EC) No. 24/2009 concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions (ECB/2008/30), which was passed on 19 December 2008, obliging financial vehicle corporations to report quarterly balance sheets. Reporting is obligatory for all financial vehicle corporations resident in Ireland.
The full data series for Ireland is available on the Central Bank of Ireland website and euro area statistics are available from the ECB website here.

‘Financial vehicle corporations’ (FVCs) are undertakings which are constituted pursuant to National or Community Law and whose principal activity meets both of the following criteria:

• To carry out securitisation transactions which are insulated from the risk of bankruptcy or any other default of the originator.
• To issue securities, securitisation fund units, other debt instruments and/or financial derivatives, and/or to legally or economically own assets underlying the issue of securities, securitisation fund units, other debt instruments and/or financial derivatives that are offered for sale to the public or sold on the basis of private placements.

‘Securitisation’ refers to a transaction or scheme whereby: (i) an asset or pool of assets is transferred to an entity that is separate from the originator and is created for or serves the purpose of the securitisation; and/or (ii) the credit risk of an asset or pool of assets, or part thereof, is transferred to the investors in the securities, securitisation fund units, other debt instruments and/or financial derivatives issued by an entity that is separate from the originator and is created for or serves the purpose of the securitisation.