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Why the asset-backed securities market is flourishing in the US

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Why the asset-backed securities market is flourishing in the US

Following the recent ABS East Conference in Miami, Ocorian's Associate Director of Product Development, Sinead McIntosh, highlights the salient points impacting the burgeoning US asset-backed securities industry.

With nearly 5000 in attendance at the Miami Beach conference, there was an audible buzz around the Fontainebleau hotel, and understandably so. Despite a challenging political climate, the US Structured Finance market is incredibly buoyant, feeding off a US economy that posted a 4.2% increase in GDP for 2018's Q2.

Key takeaways

  • Throughout the conference, it was evident that the CLO market in the United States is continuing to boom. In 2018 alone, there has been $95bn in new issuances and over $90bn in resets; even the summer break didn't dampen activity. This substantial volume of deal flow is driven by rising interest rates, prompting demand for floating rate coupons and a strong supply of new leveraged loans.
  • After two decades of economic stagnation following the collapse of their asset price bubble, Japanese banks are piling into the US market with a long term strategy, dramatically increasing their dollar exposure and stepping in to fill the place of retreating US lending banks.

Despite economic growth slowing down globally, the structured finance market looks set to expand further in the coming years, increasing demand for experienced and client-centric service providers with a global footprint. Ocorian's team of industry specialists are quick to respond across all time zones and are not strangled by internal governance, giving clients a dedicated and comprehensive service. 

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