KBRA Releases its ABS Q2 Outlook

NEW YORK--()--Kroll Bond Rating Agency (KBRA) releases a new Structured Finance research report entitled, “ABS Q2 Outlook.” The report makes the following key points:

  • As the second quarter begins, equity market volatility remains elevated and corporate credit spreads have widened from the start of the year. The ABS market was not immune to the broader macro sell-off, as spreads generally widened approaching quarter end.
  • The spread widening has likely been driven more by quarter-end technical factors, as well as broader macro volatility, rather than concerns over ABS credit fundamentals. From a credit perspective, we believe ABS fundamentals remain solid. The financial condition of the U.S. consumer is generally healthy, and with the economy continuing to add jobs at a solid pace, it’s difficult to foresee a derailment of consumer credit over the next 12 months.
  • The ABS primary market started the year off at a brisk pace, but has lost some steam over the past few weeks, as we approached quarter end. Through March 31st, $67.0bn of asset-backed paper priced in the new issue market, up 9% YoY. However, we do not believe the current pace of supply is sustainable. As such, we continue to maintain our 2018 forecast, calling for a slight contraction in ABS market volumes this year.

To access the full report, click here.

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Kroll Bond Rating Agency
Analytical Contact:
Brian Ford, CFA, 646-731-2329
Structured Finance Research
bford@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical Contact:
Brian Ford, CFA, 646-731-2329
Structured Finance Research
bford@kbra.com