ASSET-BACKED NEWS

The world of asset-backed finance (ABF) is dynamic and ever-evolving.In 2025, it's a landscape shaped by economic shifts, regulatory changes, and innovative financial instruments. Stock Market News, Ma: S P 500, Nasdaq Fall; Dollar Weakens as Trump Tariffs Loom Q A: Asset-Backed Debt Was Linked to the Credit Crisis. Financiers are once again creating andFrom the recovery of asset-backed bond values after tariff-related dips to the surge in sales of debt backed by everything from auto loans to airplane leases, asset-backed news is making headlines. Issuance of asset-backed securities is expected to reach a post-Great Financial Crisis record in 2025, driven by sectors such as prime auto loans and digital infrastructure, according to a noteBanks are leveraging ABF to meet new capital rules, and insurance companies are increasingly drawn to its higher-yielding potential.This growth is not without its complexities, with new guidance on EU risk-retention rules and ongoing debates about credit rating oversight adding layers of intricacy. A federal court decision has raised new legal risks for a corner of Wall Street that bundles consumer loans into asset-backed securities. A US appeals court last week for the first time upheld theThis article will provide a comprehensive overview of the current state of the asset-backed securities market, exploring key trends, regulatory developments, and the opportunities and challenges that lie ahead for investors and issuers alike. Asset-Backed Alert s 2025 Forecasts of ABS Issuance credited Kelly Mellecker for predicting approximately $335 billion in U.S. Rule 144A asset-backed securities issuance this year, which is in line with other industry experts who foresee a similar increase over last year s record-breaking mark of $319 billion.We’ll delve into specific sectors driving growth, like prime auto loans and digital infrastructure, and examine how innovation is fostering expansion in areas like consumer credit, transportation leasing, and even solar energy.Keep reading to navigate the latest asset-backed news and understand its implications for the financial world.

The Resurgence of Asset-Backed Securities

After weathering some initial turbulence, asset-backed bond values are showing strong signs of recovery.This resurgence is fueled by a combination of factors, including robust consumer balance sheets and the ongoing search for yield in a low-interest-rate environment.

Positive Outlook for Consumer-Backed Securities

Consumer spending remains a key driver of economic growth, and the performance of consumer-backed securities reflects this. What Is Asset-Backed Finance? In its most distilled form, ABF is lending against assets that generate cash flows. These assets can be highly diverse in nature ranging from credit-card receivables and mortgages to data centers and aircraft.As consumer balance sheets remain strong, and potential headwinds like higher borrowing costs and tighter lending have been mitigated, the outlook for this sector is increasingly positive. Citizens has restructured its Asset-Backed Finance Group, with former head John Carlin shifting focus to the bank s Private Capital initiative within its Capital Markets platform. Pete Rogers and Erik Priede, managing directors, have been appointed to lead the Corporate Credit Securitization (CCS) and Asset-Backed Securities (ABS) platformsThe Bureau of Economic Analysis provides valuable data for monitoring these trends.

Examples of asset-backed securities tied to consumer debt include:

• Auto loans: Securities backed by pools of auto loans.
• Credit card receivables: Securities backed by the outstanding balances on credit cards.
• Consumer loans: Securities backed by a variety of personal loans.

Record Issuance Expected

Issuance of asset-backed securities is projected to hit a post-Great Financial Crisis record in 2025.This growth is driven by sectors such as prime auto loans and digital infrastructure. Asset-Backed Alert, for example, forecasts approximately $335 billion in U.S. Sales of debt backed by everything from auto loans to airplane leases to Subway franchise fees have hit their highest level since the financial crisis, as banks try to meet new capital rules and insurance companies clamor for higher-yielding debt.Rule 144A asset-backed securities issuance this year, aligning with industry experts who anticipate a similar increase over the previous year's record. Backed is happy to announce that they are joining the Tokenized Asset Coalition alongside 16 new members. The Coalition - founded by Aave Companies, Base, Centrifuge, Circle, Coinbase, Credix, Goldfinch and RWA.xyz - aims to bring the next trillion dollars of assets on-chain - and Backed will now be involved in education, advocacy, and pushing the adoption of tokenized assets as part ofBloomberg data also indicates significant sales of debt backed by various assets in both the US and Europe.

Navigating Regulatory Changes and Challenges

The asset-backed securities market is subject to a complex web of regulations that can significantly impact its operation. Asset-based finance is a wide-ranging segment of private credit. It encompasses consumer and mortgage finance, including auto loans; loans and financing on hard assets such as aircraft leasing andStaying abreast of these changes is crucial for investors and issuers alike.

EU Risk-Retention Rules

New guidance on European Union risk-retention rules is forcing some U.S. issuers of collateralized loan obligations (CLOs) into difficult decisions. Asset-backed finance (ABF) is a critical tool for financing day-to-day activities for millions of businesses and consumers globally.These rules require issuers to retain a certain percentage of the risk associated with the securitized assets, which can be costly and complex to implement.

What are the key implications of these rules?

• Increased compliance costs for U.S. issuers.
• Potential restructuring of CLO deals to comply with the regulations.
• Possible shift in issuance activity to other jurisdictions.

NAIC Rating Overhaul and Insurer Concerns

The National Association of Insurance Commissioners (NAIC) is undertaking a rating overhaul that has raised concerns among insurers.Insurers worry that the regulatory body could override credit ratings without sufficient explanation, potentially impacting their investment decisions. Considered alongside its potential investment benefits, we think the asset class has earned investors attention. The private ABF asset class at the end of 20% bigger than in 20% bigger than it was in 2025. Its share of the overall asset-backed market has risen from just over one-third in 2025 to nearly half today.While the NAIC has softened its stance, the issue remains a point of contention within the industry.

Why are insurers concerned about the NAIC's rating overhaul?

• Potential for arbitrary rating changes.
• Uncertainty regarding the methodology used for overriding credit ratings.
• Impact on the risk-based capital requirements for insurance companies.

Legal Risks and Consumer Loan Bundling

A recent federal court decision has introduced new legal risks for a segment of Wall Street that bundles consumer loans into asset-backed securities.A U.S. appeals court upheld a ruling that could make it easier for borrowers to sue over alleged violations of consumer protection laws.

Opportunities in Asset-Backed Finance

Despite the regulatory challenges, the asset-backed finance market offers a wide range of opportunities for investors and issuers. GCP ASSET BACKED INCOME: Trust's mission is to produce a steady income, with the occasional special dividend in good times PressThe market's growth, driven by innovation and a diverse range of underlying assets, presents attractive prospects for those who understand the nuances of securitization.

The Growth of Private Asset-Backed Finance

Moody's forecasts at least $1 trillion in private credit asset-backed finance origination over the next five years, funded by insurance investments, dedicated ABF funds, and banking partnerships.The private ABF asset class is significantly larger now than it was just a few years ago, and its share of the overall asset-backed market has risen substantially.

What factors are driving the growth of private ABF?

• Increased demand for higher-yielding assets in a low-interest-rate environment.
• Growing sophistication of investors in the private credit space.
• Innovation in securitization techniques and structures.

Expanding Sectors and Asset Classes

The asset-backed securities market has expanded significantly in both size and sector mix. Asset-Backed AlertInflationary impacts and a track record of fundraising success have contributed to the growth of these asset classes.Innovation and development are supporting growth in sectors such as consumer credit, transportation leasing, and solar energy.The market now encompasses a wide array of assets, from traditional loans to emerging sectors like digital infrastructure.

Examples of innovative asset classes within ABF:

• Digital infrastructure: Securities backed by data centers, fiber optic networks, and other digital assets.
• Transportation leasing: Securities backed by leases on aircraft, ships, and other transportation equipment.
• Solar energy: Securities backed by solar energy projects and related assets.
• Subway franchise fees: Debt backed by these fees is now being securitized.

Strategies for Investors and Issuers

Successfully navigating the asset-backed securities market requires a well-defined strategy that takes into account the current market conditions, regulatory environment, and risk appetite. The latest ABS research, including presales, industry news, and in-depth commentaries from the S P Global Ratings ABS team. Structured Finance U.S. And Canada ABS: Full-Year 2025 Roundup. Access our most recent Ratings Actions. 2025 U.S. And Canada Credit Card ABS Review.Whether you are an investor seeking attractive returns or an issuer looking to optimize your capital structure, careful planning is essential.

Due Diligence and Risk Management

Thorough due diligence is paramount when investing in asset-backed securities.Investors should carefully assess the underlying assets, the structure of the securitization, and the creditworthiness of the issuer. Green Street's global news products deliver exclusive news, ground-breaking analysis and insights, and data on the U.S, Canadian, U.K, European, and Australian commercial real estate markets. Our news sources are religiously relied on by senior executives at the largest and most active firms in the industry, helping clients react to marketRisk management is also crucial, as asset-backed securities can be subject to various risks, including credit risk, prepayment risk, and liquidity risk. Business News by Commercial Finance Topic - Asset Based Lending, Bankruptcy, Banking, Specialty Lending, Factoring, Purchase Order Finance, Real Estate Lending, Turnaround Management and more.Accessing research from firms like S&P Global Ratings is crucial.They provide presales, industry news, and in-depth commentaries.

What are the key factors to consider during due diligence?

• Quality of the underlying assets.
• Structure of the securitization.
• Creditworthiness of the issuer.
• Legal and regulatory risks.

Optimizing Capital Structure Through Securitization

Issuers can use securitization to optimize their capital structure by freeing up capital, reducing borrowing costs, and diversifying funding sources.By securitizing assets, companies can remove them from their balance sheet, improve their financial ratios, and access a wider pool of investors. Stay up-to-date with Asset Securitization Report's news analysis and data on deals and trends in the U.S. and European securitization markets.Banks, for example, are increasingly turning to ABF to meet new capital rules.

What are the benefits of securitization for issuers?

• Improved capital efficiency.
• Reduced borrowing costs.
• Diversified funding sources.
• Enhanced financial flexibility.

Staying Informed with Reliable News Sources

Keeping up-to-date with the latest asset-backed news is essential for making informed investment decisions. The TCW Group, a leading global investment firm, today announced that it has launched the TCW Private Asset Income Fund (TPAY), a private asset-backed finance interval fund to provide exposure toReliable news sources, such as Asset Securitization Report and Asset-Backed Alert, provide valuable insights into market trends, regulatory developments, and deal activity.Green Street's global news products offer exclusive news, analysis, and data on commercial real estate markets, helping clients react quickly to market changes.Regularly consulting these resources can help investors and issuers stay ahead of the curve.

The Future of Asset-Backed Finance

The asset-backed finance market is poised for continued growth and innovation in the years ahead.Technological advancements, evolving regulatory landscapes, and the increasing demand for alternative investments are shaping the future of securitization.The push towards tokenized assets and blockchain technology could further revolutionize the industry, creating new opportunities for efficiency and transparency. The U.S. asset-backed finance market is currently estimated at approximately $5 trillion and is projected to grow to $8 trillion by 2025, with the global market reaching an estimated $20 trillion.Backed, for example, is joining the Tokenized Asset Coalition to promote the adoption of tokenized assets.

What are some potential future trends in ABF?

• Increased use of technology and automation in securitization processes.
• Greater adoption of tokenized assets and blockchain technology.
• Expansion of ABF into new and emerging asset classes.
• Continued evolution of regulatory frameworks to address new risks and opportunities.

Conclusion: Navigating the Opportunities and Challenges of Asset-Backed News

The asset-backed news landscape in 2025 is a complex interplay of growth, regulation, and innovation. ABS or asset-backed securities are bonds or notes created via securitisation that are backed by a range of assets or receivables. Generically, all securitisations can be labelled ABS and it is often used as a coverall term; in some cases in SCI, ABS will be used in this manner.The resurgence of asset-backed securities, driven by strong consumer balance sheets and the search for yield, presents significant opportunities for investors. Source: Bureau of Economic Analysis. As of . Select the image to expand the view. Our outlook for the consumer has been positive but cautious for some time. As consumer balance sheets remain robust, and weakness (higher borrowing costs/tighter lending) has been insulated, we turn more constructive on consumHowever, navigating regulatory changes, such as the EU risk-retention rules and the NAIC's rating overhaul, requires careful planning and due diligence. Some $175 billion worth of debt backed by assets such as cars, credit cards and consumer loans have been sold in the US and Europe so far in 2025, according to data compiled by Bloomberg, in whatThe expansion of private asset-backed finance and the emergence of new asset classes, like digital infrastructure and solar energy, further enhance the market's potential.By staying informed with reliable news sources, implementing robust risk management strategies, and understanding the evolving regulatory environment, investors and issuers can successfully navigate the opportunities and challenges of the asset-backed finance market and reap the benefits of this dynamic sector.Consider subscribing to industry-leading publications and consulting with financial advisors to stay informed and make sound investment decisions in this ever-changing market.The future of asset-backed finance promises continued innovation and growth, making it a space worth watching closely.