The outlook for the European corporate securitisation market is unlikely to improve this year as higher pricing, illiquidity and a damping of investor demand triggered by the credit crunch has reduced its appeal as a funding pool for companies.

Standard & Poor’s says that while the underlying performance of most European corporate securitisations is sound, the market remains under pressure. This follows a series of rating cuts to monoline insurers whose guarantees are used to improve the ratings of these bond issues, while the prospect of new issuance also remains constrained by volatile market conditions.