Banks will no longer have to meet extensive disclosure requirements for their MBS deals to receive investor-friendly protections. The change was met with criticism from an Obama appointee to the FDIC’s board.
The $122 million issuance by Oasis Financial will be backed by litigation funding and medical-lien advances related to personal injuries. The deal received a preliminary A- rating.
A $175 million prime auto ABS issued by GTE Federal Credit Union in November was the first rated ABS issued by a credit union. Other deals are likely to follow thanks to revisions made by the NCUA.
To avoid retaining risk in securitization deals, mortgage lenders are joining hands with investors who act as “co-sponsors” and take on the first-loss position.
Issuance of aircraft-related ABS is expected to shoot up in the coming years but industry analysts are warning about potential performance issues. Fitch said it’s taking a cautious approach to rating new deals.
Issuance of marketplace lending ABS is expected to increase slightly, led by optimism in the economy and improved underwriting criteria, according to rating services.
Issuance could increase by about 2%, helped by strong demand from investors for vehicle ABS. Loan performance, however, is expected to slip, according to industry analysts.
Since 2006, only one rated whole business securitization has defaulted. Investors in the deals are protected by various features, including a model that isn't particularly reliant on issuer profits.
For the third straight year, in 2018, marketplace lenders held the top spot in the unsecured personal lending space. Meanwhile the share of banks dropped to 28%.
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