2025 European Structured Finance Sector Outlook: Keep Calm and Carry On

2025 approaches with a degree of uncertainty as questions remain around inflation, interest rates, and ongoing geopolitical risks. However, the signals are relatively clear for European securitisation markets. The prospects for expansion of the market are improving with potential regulatory revisions imminent. Challenged collateral markets are facing improving conditions—namely, declining rates. However, the year ahead is not without its challenges, as borrowing rates are declining very slowly, economies are varied in their performance expectations, and the geopolitical backdrop may spur market disruption and cost increases. That said, European securitisation markets have performed well during a difficult period for collateral borrowers throughout 2023 and 2024. Some markets have fared better than others, but the backdrop for 2025 is improving. In this report, KBRA details its Outlook for European securitisation markets in 2025—including performance trends, new issuance forecasts, and…