KBRA Releases its Structured Finance Outlook for 2019
NEW YORK--(BUSINESS WIRE)--Dec 14, 2018--Kroll Bond Rating Agency (KBRA) has released its 2019 Structured Finance Outlook titled “Back to the Fundamentals.” The report makes the following key points:
As we turn the calendar to 2019, securitized credit fundamentals appear to be on solid footing. The ABS and RMBS markets have benefited from tight labor markets and meaningful consumer deleveraging since the financial crisis. Meanwhile, employment growth and capital flows into the CRE sector continue to support demand fundamentals and property prices. Finally, while acknowledging recent market volatility, we expect loan default rates to remain relatively subdued overall next year, which we think will support structured credit fundamentals in 2019.
Technical pressures in the first half of the year and the recent market sell-off have pushed spreads across much of the securitized market to their widest point since early 2017. This reinforces our view that the largest risk to securitized credit remains macro/systemic in nature. While the securitization market will not be immune to further broad macro sell-offs in the year ahead, we believe the sector should outperform in such scenarios given the high quality and relatively short-dated nature of many of its asset classes.
As the cycle continues to mature, insightful analysis – on both the macro and securitized fronts – will be key. In this report we discuss our thoughts on credit fundamentals in each of the major securitized credit sectors and provide our expectations for new issue supply in 2019. A more in-depth discussion of sector level performance and our outlook for 2019 can be found in the ABS, CMBS, RMBS, and Structured Credit Outlooks.
To view the report, please click .
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is 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.
View source version on businesswire.com:https://www.businesswire.com/news/home/20181214005282/en/
Brian Ford, CFA, Structured Finance Research
KEYWORD: UNITED STATES NORTH AMERICA NEW YORK
INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE
SOURCE: Kroll Bond Rating Agency
Copyright Business Wire 2018.
PUB: 12/14/2018 10:13 AM/DISC: 12/14/2018 10:13 AM