CLO issuance has gained speed with the macro environment looking good and interest rates rising. Note: While S&P was quick to downgrade deals during the pandemic, upgrades have been slower.
Data center securitizations issued in recent years carry elevated leverage that is inconsistent with the A rating they received from rating services other than Fitch.
JPMorgan Chase Bank’s third risk-sharing deal involving auto ABS is based on a reference pool of loans with an unpaid principal balance of $3.98 billion. The loans will remain on the bank’s books.
American Airlines is the latest airline to upsize a transaction tied to its mileage rewards program. United started the trend in July and Delta followed in September.
Issuance of container ABS surged in the third quarter of 2020 only to deflate in the fourth quarter. KBRA has a positive outlook for the sector despite the ongoing coronavirus.
For years, industry analysts raised concerns about the quality of CLOs, warning of poor performance. While issues from the coronavirus prompted some problems, AAA-rated tranches of CLOs have held strong.
The expiration of payment relief will result in a modest increase in delinquencies but resumed payments will support cash flows for the ABS deals, according to industry analysts.
Less than $1 billion of credit card ABS were issued in the first nine months of 2020 even though outstanding deals are performing well. Delinquencies are expected to increase.
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