Companies looking for financing that previously haven’t tapped the ABS market are seeing ABS issuance as an option due to changes in the broader financial market.

S&P has assigned AAA ratings to the latest ABS from Octane Lending. The deal is stocked with loans on various powersports vehicles, such as ATVs.

Delinquencies and impairments continued to increase on unsecured consumer ABS and subprime auto ABS at the end of 2022. Credit card ABS performance is holding up better.

Attorneys and structured finance trade groups are combing through the SEC’s proposed rule on conflicts of interest in ABS transactions. Some are concerned the rule might prevent actions to support liquidity or hedging.

Neighborly, which offers home services through 31 brands, is in the market with its third annual whole-business ABS. The offering differs in some ways from ABS previously issued by the firm.

The proposed rule is meant to prohibit ABS issuers from engaging in “conflicted transactions” that could influence the deal structure in a way that puts their interests ahead of those of investors.

The key vehicle ABS sector took a big hit in the fourth quarter but still accounted for over 40% of total ABS issuance last year. Analysts say market fundamentals are moving in the right direction. (Includes two data charts.)

Spreads on auto ABS issuance are tightening and issuers are upsizing deals amid strong demand.

Governance and social risks are the main ESG factors that affect credit ratings of MBS and ABS, while environmental relevance remains low, according to Fitch Ratings.

The FHFA will significantly reduce a controversial fee for comingled securities in UMBS; no consistent trend in delinquencies and losses across MBS and ABS in December; term SOFR not an option as GSEs leave LIBOR behind.