With marketplace lending securitization volume on track to have one of its best years, analysts at Morningstar Credit Ratings expect the sector to continue growing in 2019 despite some headwinds in the economy and the regulatory landscape.

The fundamentals of non-mortgage ABS will remain relatively strong in 2019, with $249 billion in issuance compared with what’s expected to be a post-crisis high of $245 billion at the end of this year, according to a recent forecast by Kroll Bond Rating Agency.

The first post-crisis subprime auto ABS to suffer a downgrade has been demoted further due to ongoing performance issues. The downgrades so far have been limited to the lowest tranche of the ABS issued by Honor Finance, but the class B notes are on watch for a potential downgrade.

Performance of ABS backed by credit-card receivables remained strong in the third quarter of 2018 despite rising consumer-debt levels, according to an update from Moody’s Investors Service.

Green securitizations have sprouted across the structured-finance industry, sometimes impacting a transaction’s credit quality, Moody’s Investors Service said in a recent report.

The Structured Finance Industry Group has welcomed a recent court ruling that allows ABS investors to intervene in a case brought by the Consumer Financial Protection Bureau that aimed to hold securitization trusts liable for violations committed by servicers.

A federal court recently allowed asset-backed securities investors to intervene in a case brought by the CFPB against securitization trusts. Industry participants said it is an important and favorable decision for the securitization industry. Back in September 2017, the CFPB brought an enforcement action against National Collegiate Student Loan Trusts regarding certain student loan debt-collection practices. While the CFPB acknowledged that subservicers – not the trusts themselves ...

Issuance of new non-mortgage ABS dropped significantly from the second to the third quarter of 2018, although a few sectors saw increased volume, according to a new Inside MBS & ABS analysis and ranking of the market. [Includes two data charts.]

ABS issued as private placements tend to draw less demand from investors than deals registered with the Securities and Exchange Commission, but issuers have a number of incentives to bring deals as private placements, according to industry participants.

Despite the slowdown in the securitization of residential property assessed clean energy assessments, the market is in good condition because of its low credit risk and growing consumer protection, according to Morningstar Credit Ratings.