Attendance at the ABS East conference hit a record this week even as industry participants are anticipating a recession. Parts of the ABS market are offering investors better returns than corporate debt.
Bank demand for agency MBS is weak, leading to wider spreads and losses on MBS holdings for some. Banks are also reducing their lending activity, providing an opening for nonbanks.
Vehicle ABS issuance reached a record $46.5 billion in the third quarter, and that doesn't count rental-fleet financing. But a sharp decline in auto-dealer floorplan securitization led to a slip in business ABS production. (Includes three data tables.)
When servicing on auto ABS transferred earlier this year following the failure of two issuers, delinquencies on the deals spiked. Months later, defaults remain well above the levels seen before the transfers.
A lawsuit accusing Moody’s and S&P of fraud and negligent misrepresentation in rating auction rate securities in the runup to the 2008 crisis was dismissed by a New York court last week.
The Department of Energy is providing a 90% guarantee on loans in an ABS from Sunnova Energy. The loans are part of DOE’s new solar program, Project Hestia.
Federal Reserve examiners didn’t do enough to prevent the failure of Silicon Valley Bank, according to the Fed’s IG. Now, the Fed is working to address interest rate risk tied to bank holdings of MBS and ABS.
Loans in a new ABS from Cross River Bank were originated in partnership with Upstart Network. Partnerships with banks provide interest-rate preemption to many nonbank lenders.
Some SWFs in other countries have extensive ownership interests in major corporations and sweep much of their profits into state coffers.
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