Investors are showing strong demand for various types of esoteric ABS, including data center securitizations, whole-business transactions and deals tied to music royalties.

Attendance at the ABS East conference hit another record this week, with investors showing strong demand for structured finance products. Issuance is expected to remain elevated, helped by interest rate moves.

Issuance of vehicle ABS is nearing another record and spreads remain tight, indicating that there’s plenty of investor demand for the asset. There are some concerns about performance, particularly for subprime auto ABS.

The key vehicle ABS sector slowed in the third quarter and business-finance securitization stalled. But issuance in the first nine months of 2024 was up 22.9% from last year. (Includes three data tables.)

Ascent Funding has an offering backed by loans tied to coding classes. Morningstar has warned that ABS investors aren’t protected in the event of a bankruptcy by the borrower.

NewtekOne is boosting originations of small business loans outside of the SBA 7(a) program. The firm recently issued its second ABS of the loans, offering strong yields for issuers and investors.

Esoteric assets such as data centers and HEIs have seen increased investor interest due to higher interest rates.

Delinquencies and losses on subprime auto ABS have been rising. Improved underwriting and inflation leveling out could help improve performance, according to industry analysts.

Cogent Communications is using 13 million IP addresses as collateral for a novel securitization.

It’s been almost 20 years since the ABS market had a quarter like the first three months of 2024. Some 72 of the 114 issuers that brought deals to market in the first quarter were on the sidelines in the previous period. (Includes three data tables.)