If the U.S. economy enters a recession, MBS and ABS are expected to perform relatively well, according to S&P. Subprime auto ABS, certain commercial MBS and CLOs are most at risk for downgrades.
A new private activity bond will fund construction of tolled express lanes near Washington, DC. Toll revenues on similar bonds have been strong and rating services affirmed BBB ratings on outstanding issuance.
Fitch Ratings called out other rating services for allowing credit enhancement levels that it views as inadequate on ABS from marketplace lenders. Other rating services are seen as getting more comfortable with the sector.
Rating services are getting more comfortable with ABS and MBS stocked with loans originated by marketplace lenders. The share of such issuance with credit ratings is increasing and credit enhancement requirements for the deals are declining. Marketplace lenders, also known as fintech lenders, started by matching individual investors with borrowers, and funding evolved in recent years to institutional investors and ABS and MBS. Some $2.6 billion of marketplace lending ABS ...
Delinquencies on subprime auto ABS are rising, according to data from the Federal Reserve Bank of New York. But S&P Global Ratings said the situation may not be as bad as the Fed suggests.
The market leaders in rating non-agency MBS and non-mortgage ABS retained their top rankings in 2018. S&P Global was the top rating service in the ABS market, according to a new Inside MBS & ABS market analysis, after rating $142.24 billion of new issuance, an 11.6% percent increase from 2017. [Includes two data charts.]
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