The solar ABS market has received “much needed clarity” in recent months following uncertainty tied to the Trump administration, according to Bank of America Global Research.
Fed still working toward a Treasury-only balance sheet; BlackRock, Hoplon units partner to bring in new ABS issuers; ABS East set for record attendance; CREFC adjusts plans for DC symposium.
Residuals from securitizations can generate close to 20% in returns though the asset class carries significant risks. Nonbanks are showing a strong appetite for the asset, but there is limited liquidity.
The criteria are looser than Fitch’s previous standards. The updates include higher penalty on mortgages with DSCR below 0.75x and an expanded modification outcome scenario to derive total loss severities to second-lien collateral.
Federal Reserve guidance issued in 2023 has opened up depositories to issue more synthetic-risk transfer securitizations in a market that was historically dominated by European banks.
Rocket is set to issue its second consumer loan ABS; Golub Capital issues rare long-duration CLO; large jumbo MBS from Chase; ratings performing as expected.