Issuance of ABS backed by music royalties will continue to grow, according to KBRA. Also, streaming royalty rates, a large share of music catalog revenues, are expected to increase in coming years.
Speakers on a recent dv01 panel said unemployment would be a key factor in performance moving forward. Unsecured consumer loans are demonstrating some weakness, while auto performance is normalizing.
CRT transactions from Western Alliance Bank and Pacific Western Bank face scrutiny amid bank failures; impairments on unsecured consumer loans in ABS decline; Credit Suisse and what’s to come.
The 60-day-plus delinquency rate on subprime auto ABS hit a record in December. Performance is expected to decline this year and non-investment-grade ratings could face downgrades.
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.
Fitch Ratings said the most robust subprime auto ABS issuers will probably perform well even in a downturn, but several risks lie ahead for the sector.
SFA is seeking feedback on revisions to TRID Grid for residential MBS; timeshare ABS properties and borrowers are under evaluation following Hurricane Ian.
Delinquencies on auto ABS are now above pre-pandemic levels, while losses are approaching the same threshold. Still, rating services aren’t too concerned, noting used vehicle prices and unemployment levels.