Asset-backed securities news covering ABS issuance, CLOs, mortgage-backed securities, securitization markets, ratings, and structured credit developments.
Profits in the $1.3 trillion collateralized loan obligation market have deteriorated so badly that investors are exiting and arguing over who is to blame. CLOs, which package corporate loans into risk tiers, are a favorite of pensions and hedge funds.
This commentary argues that the bull market in loans is causing losses for CLO equity buyers, contrary to expectations that credit problems would be the main issue. It suggests that the repricing of loans in a strong market is the primary challenge, and discusses broader implications for private credit and diversification into hard assets.
This commentary argues that housing affordability, mortgage-market modernization, and changing refinance behavior are reshaping the outlook for mortgage-backed securities. It contends that new credit-score models and lender choice could expand mortgage access while complicating prepayment and credit analysis for MBS investors.
Klarna completed a three-year, $518M SRT securitization to free up regulatory capital and support $12B in additional lending. The deal is part of a broader capital-efficiency program that also includes forward-flow and warehouse financing.