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Corporate & Institutional

Taking the Pulse of the ABS Market: 5 Insights from Global ABS 2024

June 7, 2024

1. Enthusiasm is running high

While the global economy and credit market conditions create challenges, they also offer many opportunities for issuers and investors to innovate and participate in financing transactions, from private credit to the CLO, MBS, and other securitised debt markets.

2. Emerging technologies offer promise

For the capital markets, cutting-edge technologies such as distributed ledger technology (DLT), AI, and alternative data are revolutionising underwriting, servicing, and decision-making processes. They also benefit providers from legal to trustees and agents. Patrick Tadie, Executive Vice President, Global Capital Markets, Wilmington Trust, joined a panel of experts looking at the implications. We are still in the early days, but the potential is compelling.

3. Securitisation in sustainability deals

Consensus is strong that securitisation can play a significant part in financing energy transition and other sustainability initiatives. As a result, many stakeholders are investing effort into ESG methodologies, analytics, and disclosure practices to incorporate sustainability factors into processes with metrics and impact reporting.

4. Regulatory monitoring, adaptation, and compliance

These practices continue to be a central concern in the industry. We heard frequent discussions and questions around future global securitisation regulations, the use of Non-Performing Loan (NPL) Guarantee Markets, and the implications of Basel 3.1, sometimes called Basel IV, in strengthening banks’ capital requirements and helping drive more non-bank lending.

5. Trustees matter

We may be biased, but we hear increasing recognition of the value added by trustees in securitisations. They help stabilise residential and commercial real-estate securitisations while maintaining preparedness for potential defaults. Trustees have deep experience in issues like emerging technologies, release of security structures, and electronic consents. Discussion of both safety and innovation was a central part of the panel on “Trustee Perspectives of Current Market Issues,” which included Daniel Wynne, Director, Structured Finance, Wilmington Trust.

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Our team left the conference inspired and energised by the vibrancy and forward-thinking nature of the global securitisation community. If we missed you or you didn’t have a chance to attend, we’d be happy to set up a call and connect with you.

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This article is for educational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service or as a determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situations, and particular needs. This article is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.

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