Vehicle-finance deals remained the backbone of ABS production in the first half of 2019, but transactions backed by consumer loans are a faster-growing segment.
Issuance of whole-business ABS is on track to break a record this year, with $4.6 billion in volume at halfway mark. Issuers include fast food companies, aftermarket car services and spa services.
ARRC publishes details on how MBS and ABS linked to LIBOR can transition to a different reference rate. The fallback language applies to newly-issued deals.
Performance of the subprime auto ABS market is expected to decline, which likely will prompt higher credit-enhancement requirements from rating services.
Investors and issuers are divided on the usefulness of disclosure requirements for MBS and ABS. While investors said disclosures encourage them to buy securities, issuers cited them as a burden.
Morningstar plans to buy fellow rating agency DBRS for $669 million. Currently, there are 10 nationally recognized statistical rating organizations, and speculation is the space could be ripe for consolidation.
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