-

KBRA Releases Research – 2026 Structured Credit Sector Outlook: Record Issuance in a Maturing Credit Environment

NEW YORK--(BUSINESS WIRE)--KBRA releases its 2026 Structured Credit Sector Outlook, which provides market and performance themes as of year-to-date (YTD) 2025, as well as issuance volume and forecasts for 2026, collateral performance trends, and rating surveillance outcomes.

Some key takeaways from the report include:

  • Themes to Watch: Assuming a more accommodative interest rate environment, we expect increased merger and acquisition (M&A) and leveraged buyout (LBO) activity, spurring primary loan issuance and CLO formation.
  • Issuance Volumes: U.S. collateralized loan obligation (CLO) issuance—including broadly syndicated loans (BSL) and middle market (MM) CLOs—is projected to reach $220 billion in 2026, a 10% increase from KBRA's $198 billion estimate for 2025 and a new high-water mark for the market. European CLO issuance is expected to reach EUR60 billion in 2025, with similar issuance expected in 2026.
  • Spreads: Tightening has continued across the structured credit landscape since the highs of late 2022 through 2023. KBRA expects spreads to remain range-bound in 2026.
  • Credit Performance: Portfolio credit quality bears monitoring but has been manageable in 2025. Corporate borrowers will likely benefit from a more constructive financing environment as the calendar turns to 2026. However, pockets of stress are beginning to materialize, indicating that MM default rates will rise from recent lows.
  • Surveillance Activity: Performance has remained strong, with no downgrades in 2025. Looking ahead, KBRA expects overall stability in 2026, with potential for modest positive rating migration driven by continued rate relief and loan amortization, while negative drift is likely to remain limited to seasoned, lower-rated tranches.

KBRA has streamlined the Outlook format this year to enhance the reader experience. We welcome any feedback or comments.

Click here to view the report.

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1012381

Contacts

Sean Malone, Senior Managing Director, Co-Head of Global Structured Credit
+1 646-731-2436
sean.malone@kbra.com

Gabriele Gramazio, Senior Director
+44 20 8148 1001
gabriele.gramazio@kbra.com

Eric Hudson, Senior Managing Director, Co-Head of Global Structured Credit
+1 646-731-3320
eric.hudson@kbra.com

Yee Cent Wong, Senior Managing Director, Lead Analytical Manager, Structured Finance Ratings
+1 646-731-2374
yee.cent.wong@kbra.com

Media Contact

Adam Tempkin, Senior Director of Communications
+1 646-731-1347
adam.tempkin@kbra.com

Business Development Contact

Jason Lilien, Senior Managing Director
+1 646-731-2442
jason.lilien@kbra.com

Kroll Bond Rating Agency, LLC

Details
Headquarters: New York City, New York
CEO: Jim Nadler
Employees: 400+
Organization: PRI

Release Versions

Contacts

Sean Malone, Senior Managing Director, Co-Head of Global Structured Credit
+1 646-731-2436
sean.malone@kbra.com

Gabriele Gramazio, Senior Director
+44 20 8148 1001
gabriele.gramazio@kbra.com

Eric Hudson, Senior Managing Director, Co-Head of Global Structured Credit
+1 646-731-3320
eric.hudson@kbra.com

Yee Cent Wong, Senior Managing Director, Lead Analytical Manager, Structured Finance Ratings
+1 646-731-2374
yee.cent.wong@kbra.com

Media Contact

Adam Tempkin, Senior Director of Communications
+1 646-731-1347
adam.tempkin@kbra.com

Business Development Contact

Jason Lilien, Senior Managing Director
+1 646-731-2442
jason.lilien@kbra.com

Social Media Profiles
More News From Kroll Bond Rating Agency, LLC

KBRA Assigns Preliminary Ratings to OBX 2026-NQM2 Trust

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to 14 classes of mortgage-backed notes from OBX 2026-NQM2 Trust, a $809.8 million non-prime RMBS transaction. The underlying collateral, comprising 1,553 residential mortgages, is characterized by fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 92.6% and 7.4% of the pool, respectively. A majority of the loans are either classified as non-qualified mortgages (Non-QM; 42.1%) or exempt (46.8%) from the Ab...

KBRA Assigns Preliminary Ratings to COOPR Residential Mortgage Trust 2026-CES1 (COOPR 2026-CES1)

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to eight classes of Certificates from COOPR Residential Mortgage Trust 2026-CES1 (COOPR 2026-CES1), a $253.3 million RMBS transaction, as of the cut-off date, sponsored by Nationstar Mortgage LLC d/b/a Mr. Cooper and Loan Funding Structure VIII LLC and consists almost entirely of 3,438 newly originated closed-end second lien mortgages (CES; 99.9%). The underlying pool is seasoned one month and all loans are originated by Mr. Cooper. Th...

KBRA Assigns Preliminary Ratings to GS Mortgage-Backed Securities Trust 2026-NQM1 (GSMBS 2026-NQM1)

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to 10 classes of mortgage-backed certificates from GS Mortgage-Backed Securities Trust 2026-NQM1 (GSMBS 2026-NQM1). GS Mortgage-Backed Securities Trust 2026-NQM1 (GSMBS 2026-NQM1), is a $410.6 million RMBS transaction sponsored by Goldman Sachs Mortgage Company (Goldman Sachs). The transaction is collateralized by a pool of 1,076 fixed-rate residential mortgages (FRM; 100.0%), and includes a meaningful concentration of collateral that...
Back to Newsroom