The Structured Finance Association has launched a task force to help the industry incorporate environmental, social and corporate governance practices into the issuance of MBS and ABS.

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.

The online marketplace’s new platform for institutional investors to purchase unsecured consumer loans is aimed at increasing liquidity.

Low interest rates, along with better alignment of incentives between issuers and investors, are helping boost demand for securitized assets.

Market participants are finding it difficult to move away from LIBOR in the absence of an alternative rate and because of document-related issues.

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%.

Issuance of whole-business ABS is on track to break a record this year, with $4.6 billion in volume at halfway mark. Issuers include fast food companies, aftermarket car services and spa services.

A recent court ruling in the case of Powell v. Ocwen Financial could significantly expand liability for non-agency MBS participants by subjecting MBS transactions to the Employee Retirement Income Security Act. 

 

The transition away from the London Inter-bank Offered Rate could prompt significant tax issues for MBS and ABS investors. The Structured Finance Industry Group wrote to the Internal Revenue Service and Treasury last week requesting guidance on the issue. LIBOR won’t be available after 2021 and market participants are looking for an alternative reference rate. Various securities are tied to the London benchmark rate in terms of the loans that back the deals and their ...