Some investors in MBS and ABS are ready to discard data collected in the past two years due to distortions from actions by the federal government. One problem: projecting asset performance moving forward.
Although only $4.5 billion of TALF funding was requested during the facility’s pandemic-related course, the Federal Reserve program is credited with stabilizing the ABS market.
Most of the modest gain in bank ABS investment came from a handful of large banks buying deals backed by unsecured consumer loans, a fast-growing market. (Includes two data charts.)
One of the five draft bills proposed by the House Democrats this week seeks to establish a board that would be responsible for assigning rating services to provide grades on MBS and ABS.
CLO issuance has gained speed with the macro environment looking good and interest rates rising. Note: While S&P was quick to downgrade deals during the pandemic, upgrades have been slower.
The SEC’s Investor Advisory Committee wants increased regulatory disclosures in the sector. However, an SEC commissioner questioned the utility of the proposal.
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