The new bonds help the GSEs reduce the amount of capital they must set aside under the enterprise regulatory capital framework.

Officials at Rithm Capital believe that regulatory uncertainty will lead banks to sell more assets through asset-based finance structures, turning to asset managers like Rithm.

Investor interest in bank credit-risk transactions is expected to grow even if the transactions face regulatory challenges.

Spreads on GSE CRT issuance are close to all-time tights, with strong demand from money managers, hedge funds and insurance companies. (Includes data table.)

Early data from Fannie Mae and Freddie Mac suggest that, despite the one-two blow of Hurricanes Helene and Milton, the storms’ impact on GSE credit-risk transfer transactions is relatively modest.

The Federal Reserve should allow banks to increase issuance of credit-linked notes, according to House GOP lawmakers.

Initial details on the planned re-proposal suggest that banks will benefit from the mortgage concessions by federal regulators.

For the sixth straight quarter, CAS issuance at Fannie Mae exceeded STACR issuance at Freddie Mac. Overall CRT issuance by the GSEs was down 18.0% in the second quarter. (Includes data table.)

Sen. Jack Reed, D-RI, warned that credit-risk transfer issuance by banks could prompt a financial crisis. He asked the Fed to place limits on bank CRT activity.

Fitch generally views the deals as “credit neutral” for bank ratings, though there are some instances where CRT usage could put a bank’s ratings at risk for downgrade.