Equipment ABS and other types of corporate securitizations should hold up well, even in the face of an economic slowdown, according to projections by Moody’s Investors Service.
The federal government’s new income-driven repayment plan, introduced after the Supreme Court decision, should drive prepayments higher to the benefit of seasoned deals, rating services said.
Issuance of student loan ABS has been constrained by rising interest rates and uncertainty on federal forbearance policies, among other issues. With payment requirements on federally backed loans set to resume, delinquencies could increase.
Higher interest rates are contributing to elevated delinquencies in auto ABS; Kroll places ratings on 11 commercial MBS on watch for downgrade; DBRS adds asset types to rep and warrant analysis; DBRS proposes updating its ESG analysis.
Former Federal Reserve official joins SFA; delinquencies rising on credit card and student loan ABS; KBRA creates new business development role for structured finance.
Another subprime auto ABS issuer closed its dealerships last week. Back-up servicers can help to protect investors from failing issuers, though there were some complications with a recent servicing transfer.
Issuance of ABS backed by music royalties will continue to grow, according to KBRA. Also, streaming royalty rates, a large share of music catalog revenues, are expected to increase in coming years.
Speakers on a recent dv01 panel said unemployment would be a key factor in performance moving forward. Unsecured consumer loans are demonstrating some weakness, while auto performance is normalizing.
CRT transactions from Western Alliance Bank and Pacific Western Bank face scrutiny amid bank failures; impairments on unsecured consumer loans in ABS decline; Credit Suisse and what’s to come.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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