RISK IS OUR BUSINESS
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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
Effective NPL resolution is critical to banking-sector resilience, capital efficiency and lending capacity. ARC’s analysis compares market-based securitisation and bad-bank solutions with traditional internal workout approaches, highlighting their differing implications for risk transfer, liquidity, investor participation and financial-market development. Increasing integration and harmonisation of European financial markets and regulatory frameworks could further facilitate market-based NPL resolution, creating new opportunities for investors.
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September 3, 2026
EU/EEA banks entered 2026 with overall asset quality remaining broadly stable, but the headline figures continue to mask material differences between lending segments. Consumer credit recorded the highest NPL ratio among the major segments shown, at 5.56%, compared with 1.37% for mortgages, while Stage 2 exposures remained historically elevated at 9.11%. The more relevant read-across for consumer ABS is therefore at pool level, where early arrears and servicing performance may provide a clearer indication of emerging stress than system-wide asset-quality measures.
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September 3, 2026
Applying a consistent, fundamentals based analytical approach to private ratings/credit assessments will enhance transparency in private credit markets. ARC’s analytical framework, which mirrors its public corporate rating methodology, provides comparable and forward looking credit opinions despite more limited information. This matters as investor demand and regulatory scrutiny increase, because it improves risk benchmarking, supports more disciplined capital allocation, and addresses the comparability gap in a largely unrated and opaque market.
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September 3, 2026
Diversification in the CDMO industry is evolving beyond customers and geographies, with supply-chain resilience emerging as a key consideration for revenue durability and credit assessment.
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September 3, 2026
Contract quality is increasingly outweighing duration as a driver of differentiation across ARC’s portfolio of European business services credit assessments. The benefit of contracted revenue depends heavily on whether the underlying agreement protects operating margins and cash conversion under stress, rather than simply offering historical recurrence. A multi-year contract may provide initial revenue visibility, but its support for the credit profile weakens materially if fixed pricing leaves the issuer exposed to unmitigated cost inflation or delayed customer payments.
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September 3, 2026
