North America Structured Finance House: Barclays
Esoteric confections Favourable funding conditions and vigorous investor appetite whipped up a boom in securitisation issuance in 2024. One bank’s nimble effort stood out. For keeping up with larger, domestic rivals and for its expertise in introducing novel assets to the sector, Barclays is IFR’s North America Structured Finance House of the Year.
The US structured finance market rang up a robust 2024 as all the ingredients – a solid economy, relatively low delinquencies and Federal Reserve interest rate cuts – drove a busy assembly line of deals.
The asset-backed sector had a banner year, with issuance hitting a record US$318.8bn, eclipsing the record set in 2021, LSEG data show.
“It feels like we’re kind of at the apex again” following a subpar 2023, said Marty Attea, Barclays' global head of securitised origination.
In the reinvigorated environment, Barclays stepped up its game in the esoteric or non-traditional space, which saw a burst of fundraising, driven partly by the need to meet the growing demand to finance data centres and assets critical to artificial intelligence and digital infrastructure.
Barclays ranked as the second most active bookrunner for non-traditional ABS deals in 2024, improving on the previous year by one place, according to LSEG.
While its larger US rivals captured mandates for regular auto and other “flow” deals, the UK bank’s ability to concoct esoteric deals helped maintain its fifth place for overall asset-backed underwriting in 2024, unchanged from the year before, according to LSEG.
Barclays played a key role in May in creating the biggest ever whole business securitisation. The US$3.35bn offering from Roark Capital was part of the private equity firm’s financing for its US$9bn acquisition of Subway, the world’s largest sandwich chain. The blockbuster issue was followed by a US$2.335bn security four months later to pay off a US$5.4bn loan for Roark’s purchase.
Another acquisition-driven WBS deal led by Barclays was the US$570m issue in August from Blackstone for its purchase of juice chain franchiser Tropical Smoothie Cafe.
“If it’s associated with M&A or acquisition finance and it’s a big splashy trade, we’re around it,” Attea said.
The Subway and Tropical Smoothie deals contributed to a supply resurgence in whole business securitisations backed by franchise royalties. They totalled US$11.8bn in 2024, which was US$10bn more than the year earlier.
Barclays also structured a spate of deals for fibre network operators such Frontier, Blue Stream and Hotwire and cell tower companies like SBA and Vertical Bridge.
“You’ve seen the majority of those issuers now moving over to us to lead-left their transactions,” said Ben Fernandez, Barclays’ head of esoteric ABS.
A deal that showcased the bank’s esoteric prowess was the inaugural issue backed by art loans originated by Sotheby’s Financial Services. The US$700m offering in April was backed by paintings and artwork in a range of styles from Old Masters to modern art.
Another example of Barclays’ expertise in novel assets was its placement in September of Cherry Technologies' US$400m securitisation of plastic surgery and elective surgery loans, marking the first time that this type of lending to consumers had come to the ABS market.
“It can be a Herculean effort to do all these deals,” Attea said. “Whether it’s beauty for your wall or beauty for the body.”
In addition to making a sizeable impression in the ABS sector, Barclays managed the books on more than 100 residential mortgage issues in 2024, placing it third among RMBS bookrunners in LSEG’s league table.
“We were pumping out resi deals of all the different sectors,” Attea said.
It also demonstrated market leadership in home equity agreement deals, an emerging RMBS asset class in which fintech firms give homeowners cash in exchange for taking a share of the equity in their homes to profit from rising house prices.
After helping Unlock Technologies to issue the first rated HEA securitisation in 2023, Barclays in June led Hometap’s first fundraise backed by these assets.
Barclays also pulled off a solid showing in the commercial mortgage sector, which is still bogged down by elevated interest rates and soft office demand. It ranked eighth in LSEG’s league table, the second-highest placement for a non-US bank.
To see the digital version of this report, please click here.
To purchase printed copies or a PDF of this report, please email leonie.welss@lseg.com
