The performance of MBS and ABS isn’t expected to be directly impacted by the fallout of Russia’s invasion of Ukraine in the near term; prepayment rates on agency MBS declined in February.
Momentum for aircraft securitizations won’t come until late 2022, according to Fitch. Sanctions on Russia and damage to planes in Ukraine could sink certain deals.
Over the course of the full year, bank holdings of auto loan securitizations rose 41%, but consumer ABS remained the industry’s top preference in the ABS market. (Includes two data charts.)
Overall securitization rates declined in 2021 as the historic wave of GSE and government business began giving way to increased non-agency lending. (Includes data chart.)
A $732.6 million ABS tied to music royalties closed this week. Other esoteric ABS in the market include healthcare-related financing, shipping container leases and property tax liens.
Borrowers with loans in various types of MBS and ABS could be stretched as interest rates increase, according to industry analysts. Prepayment rates are also likely to slow.
The decision, in a case pitting the CFPB against a student loan securitization trust, opens up the defendants to enforcement actions brought under federal law.
When looking at activity by rating services in 2020, the SEC found problems involving ABS and CLOs, among other issues. The regulator as usual didn’t identify the offenders.
Four firms are currently offering whole-business ABS. Two of the deals received ratings from both KBRA and S&P, though the rating services differed in their assessments.
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