Non-Mortgage ABS

Browse articles from all of our Newsletters related to Non-Mortgage ABS.

July 21, 2017 - Inside MBS & ABS

CFPB Arbitration Rule Could Fuel Litigation, Impair Securitization Market Liquidity

Last week, the Consumer Financial Protection Bureau issued its long-awaited rule banning mandatory arbitration in consumer financial contracts. The industry concern is that, if left intact, the rule could lead to a rash of litigation impairing liquidity in the secondary markets and limiting consumer access to credit as companies seek to pull back on their risk exposure. The final rule prohibits “covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service.” It further requires...

July 21, 2017 - Inside MBS & ABS

Surge in Business-Finance Sector Boosts Non-Mortgage ABS Issuance in 2Q17

A sharp increase in business-finance ABS issuance offset declines in other sectors to lift overall ABS production during the second quarter of 2017, according to a new Inside MBS & ABS analysis and ranking. The market produced $59.31 billion of new non-mortgage ABS during the second quarter, an 11.1 percent increase over the first three months of the year. That brought year-to-date issuance up to $112.68 billion, a 30.4 percent gain over the first six months of 2016. The star performer was...[Includes two data tables]

July 14, 2017 - Inside MBS & ABS

ABS Investors May Turn to ‘Moneyball’ Tactics With the Fed Expected to Increase Interest Rates

ABS investors could see strong returns by employing the “Moneyball” strategy pioneered in Major League Baseball by the Oakland Athletics, according to analysts at Wells Fargo Securities. The strategy, detailed in a book and movie, focuses on certain statistics that managers of the Athletics thought were undervalued by other teams. Wells said the theory can be adapted to the ABS market, with an emphasis on deals that can reliably hit “singles” instead of potentially risky investments that aim for home runs. “With interest rates low and ABS spreads reasonably tight, many market participants are...

July 7, 2017 - Inside MBS & ABS

Market for ABS Tied to Marine Containers Now on The Rise After Minimal Issuance in 2015 and 2016

Issuance of ABS backed by proceeds from marine container leases has increased significantly this year, with five deals pricing between March and June. The sector was relatively strong in 2013 and 2014, but only two deals were issued in 2015 and only one last year. “With global container trade volumes showing an increase and steel prices up from their lows, prospects for marine shipping container lessors may be brightening following a challenging period,” according to analysts at DBRS. Cash flows for container ABS generally depend...

June 30, 2017 - Inside MBS & ABS

SFIG Pushes Court to Support Payment Priority For MBS and ABS, Even in Bankruptcy Cases

The Structured Finance Industry Group called for an appeals court to enforce industry-established payment priority provisions in a significant case involving Lehman Brothers’ collateralized-debt obligations and a bankruptcy filing. Lehman Brothers Special Financing Inc. v. Bank of America N.A. centers on a “flip clause” included in 44 CDOs issued by the failed investment bank. SFIG noted that a flip clause redirects or reprioritizes cash flow upon bankruptcy, and is often incorporated in securitizations that include swaps. “As is common in the market, in structuring these transactions, the parties bargained...

June 30, 2017 - Inside MBS & ABS

Fitch Edged Out DBRS in Rating Non-Agency MBS in 1Q17; S&P Was Tops in Non-Mortgage ABS Market

Less than $1 million separated Fitch Ratings and DBRS in the ranking of top rating agencies serving the non-agency MBS market in the first quarter of 2017, a new Inside MBS & ABS analysis reveals. Fitch was on top, although both companies had equal shares (36.5 percent) of the market. Kroll Bond Rating (21.7 percent) and Moody’s Investors Services (17.5 percent) ranked third and fourth. S&P Global was the least active rater of non-agency MBS with just an 11.5 percent share. A significant share of non-agency MBS are issued...[Includes two data tables]

June 23, 2017 - Inside MBS & ABS

Fintech Darling SoFi Files for a Bank Charter, Deposit Insurance and Has an IPO on the Drawing Board

Marketplace lender Social Finance – a mortgage originator with a track record in securitizing consumer and student loans – has filed for a state bank charter in Utah and is also pondering selling stock to the public. For now, the privately held technology-centric firm isn’t saying much about its plans, including the initial public offering. One source familiar with the company’s mortgage operation said SoFi recently hired one executive away from a larger player by dangling the IPO and stock options. To date, there has been...

June 23, 2017 - Inside MBS & ABS

Liquidity in MBS and ABS Markets Seen as ‘Adequate,’ Although Lagging Activity in the Corporate Bond Market

Issuance volumes in various MBS and ABS sectors are generally below pre-crisis levels and liquidity in the markets is adequate, according to an analysis by the Financial Industry Regulatory Authority. But the structured finance sector hasn’t flourished as the corporate bond market has in recent years, according to FINRA. The non-governmental regulator of broker-dealers based its analysis in part on data collected by its Trade Reporting and Compliance Engine, which tracks trades in a variety of asset classes. The analysis was completed by FINRA’s Office of the Chief Economist. “Market liquidity [for MBS and ABS] seems...[Includes one data table]

June 16, 2017 - Inside MBS & ABS

Treasury Seeks Significant Regulatory Changes to Spur Non-Agency MBS Market, Boost ABS Issuance

The Trump administration wants to pare back regulations that inhibit the non-agency MBS and ABS market and tilt current securitization economics that favor the government-sponsored enterprises over private issuers. “In order to revitalize a responsible [private-label securities] market, it is important to improve incentives for issuers through reasonable reductions in costs and regulatory burdens,” the Treasury Department said in a new report released this week. In particular, it aimed at adjusting relative economics for the government-sponsored enterprises and FHA/VA mortgage programs. On the regulatory side, Treasury recommends...


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