Since then, the South African securitization market has been growing rapidly and today is characterized by innovation, increasing complexity and a diversity ofasset classes. Though it is still a young market, it has reached a level ofsophistication within a few years that took the US and European markets nearly two decades to achieve Deloitte, 2005 1. Securitization transactions in South Africa, listed on the Bond Exchange of South Africa BESA, include RMBS and CMBS Asset Backed Securities ABS which are predominantly backed by car loans Collaterized Debt Obligations CDOs and Asset Backed Commercial Papers ABCP.
This growth has been driven by a number off actors, including the existence ofsecuritization-specific legislation and security structures, a stable economic environment, well-developed legal and banking systems, and a strong investor demand for rand-denominated debt securities Gumata and Mokoena, 2005 Standard and Poors, 2006 Deloitte, 2005 Fitch Ratings, 2005a, 2006. Furthermore, the boom in all major typological real estate markets in South Africa over the last few years has contributed significantly to the rapid development ofmortgage backed securities, particularly RMBS. As shown in Figure 8.1, the total term issuance volume, excluding ABCP, reachedZAR31.7 billion EUR 3.3 billion in 2006, a44increase from 2005, resulting in cumulative term issuance ofZAR 83.2 billion EUR 8.68 billion by the end of2006 Moodys International Structured Finance, 2007c 2.