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Headquartered in Canary Wharf, London, ARC Ratings is a Pan-European credit rating agency with its main EU office in Lisbon, as well as additional staff strategically placed in numerous European locations, such as Milan, Barcelona and Madrid.
LEARN MOREHeadquartered in London, ARC Analytics is part of the ARC Risk Group, sitting alongside ARC Ratings. ARC Analytics provides complimentary access to a suite of analytical tools, data and insights to support market participants in their risk analysis across various asset classes.
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The ARC Spotlight digital series brings market leaders and industry experts together to discuss their insights on a wide range of topics.
ARC Ratings’ Ashley Thomas met with Ben Grainger, Partner in the Financial Services division at EY, to discuss Equity Release Mortgage market and in particular, how ERMs differ to Interest Only retirement Loans or Home Reversion products. In addition, it was discussed how the market has developed, focusing on which jurisdictions are currently the most active and predictions for which areas could be next.
From a ratings perspective, together they explored the type of investors typically buying the paper created by the securitisations of this asset class, which differs significantly from mainstream RMBS and look ahead to potential opportunities and challenges.
KEEP UP TO DATE WITH ARC’S MOST COMPELLING INSIGHTS ON ISSUES SHAPING THE FUTURE OF BUSINESS AND SOCIETY
Euro CLOs have been the main driver of public securitisation issuance in 2025 thanks to a relatively stable AAA clearing level.1 AAA coupons have clustered around 130 bps for much of the year, keeping equity arbitrage open and giving arrangers the confidence to keep warehouses converting even when macro sentiment wobbles.1 That stability has underpinned primary flow, anchored liability costs and helped CLOs remain the most consistent source of new issuance at a time when other asset classes have leaned more heavily on retained structures. 1 PitchBook | LCD, CLO Historical Stats (Euro) (as of 12/12/2025). "AAA" references the rating level recorded by PitchBook LCD for the relevant CLO tranche(s) (as per the sources captured by LCD) and does not represent a rating assigned by ARC Ratings
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December 18, 2025
If the pace of increase in payment-in-kind (PIK) accruals and refinancing volumes persists into 2026, then liquidity stresses will continue to build in private credit. Moderating interest rates and renewed equity support may help to lessen the impact, but the current rate of increase is outstripping overall returns.
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December 18, 2025
Credit strength in the European insurance broker market now depends less on growth velocity and more on disciplined integration, balance-sheet control, and cash-flow resilience. Private equity–backed buy-and-build platforms have driven rapid consolidation, but this expansion has also heightened leverage and execution risk against a backdrop of higher funding costs.
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December 18, 2025
RPL deals are set to expand as banks hold cured loans, policy moves reduce frictions, and investors widen participation—offering risk above prime RMBS but below NPL ABS. RPL pools consist of mortgages and other loans that previously defaulted or were non-performing but have resumed scheduled payments after restructuring or concessions.
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December 18, 2025
The scale and growth of private credit have brought new demands for transparency. Institutional investors are pressing managers for detailed portfolio data and stress tests, while the absence of public ratings has created a comparability gap that independent assessments can help to bridge. As the asset class expands, regulators and international authorities are intensifying scrutiny, warning that opacity, leverage and bank linkages could allow vulnerabilities to build unseen. These forces may help the market find a balance between the need for data to properly assess risk, while maintaining the flexibility, speed and attractive terms that private credit is known for. KEY POINTS Expanding footprint: Private credit has grown into a multi-trillion-dollar market, driven by institutional demand for yield outside traditional bank lending and public debt markets. Transparency demanded: Institutional investors are pushing managers for borrower-level data, stress tests and stronger governance, bringing private credit closer to public-market risk analysis. Macroprudential spotlight: The IMF, BIS and FSB highlight vulnerabilities, such as credit risk, high leverage and liquidity mismatches in these mostly illiquid vehicles, and warn that opacity could allow losses to build up unseen. Bank interconnections: US analyses find that private credit growth has been largely funded by banks via loans and credit lines. Bank exposures to private lending imply that a shock in this sector could transmit back into the banking system, so a need for robust data is important. Tighter rules coming: In the EU, AIFMD II will harmonise loan fund rules by limiting leverage, concentration and liquidity mismatch, while UK/FCA initiatives emphasise fund liquidity management and investor protections. Independent benchmarks: With most private credit borrowers unrated, independent credit assessments can help bridge the transparency gap, enhancing comparability across funds and supporting more robust portfolio analysis.
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December 18, 2025
