Commercial bank representatives at the ISTAT Europe conference in Prague see potential for commoditised E-note deals to attract more appetite from the market.
Deutsche Bank's managing director of structured credit for transportation Richard Moody believes that "smaller-chunk" structures could appeal to broader investors.
"I see E-notes as another part of a capital structure," he says. "What do people care about [in] that part of a deal? Is it yield, liquidity?
"The same philosophy [as in a capital-markets transaction] should apply. But E-notes have so far has been essentially taken out by single investors. As a result, we have had fairly large investments.
"If the market can develop to [where] one could apply the same thesis of making liquidity accepted for E-notes, we can then create smaller chunks of investments. This could more attractive to a broader layer of investors, which in turn could then increase interest in that product."
Moody concludes: "That's probably an area of creating more interest in that bottom-part piece."
Bertrand Dehouck, BNP Paribas's head of aviation for Europe, the Middle East and Africa, says there are lots of investors for E-notes but the only conundrum is finding "willingness of a buy" between the issuers and the buyers.
Dehouck sees hurdles to "commoditise" on the seller side because they will look to move as fast as possible in the transaction. "Issuers want to move to the transaction and take as little execution risk [as possible]," he says.
He remains hopeful that a transaction involving multiple buyers and tranches can take place.
Source: Cirium Dashboard
