Kroll Bond Rating Agency released its outlook on the ABS sector examining key trends from 2021 and providing forecasts for the new year.
KBRA expects some of the same tailwinds that benefited the ABS market over the past year to continue into the next, but headwinds will likely strengthen in the months ahead, causing the occasional bout of turbulence in 2022. According to KBRA, the ABS market will likely remain an attractive source of funding for issuers/sponsors across the spectrum of ABS asset types given low benchmark rates and strong investor demand. This, coupled with the strong economic growth KBRA expects for 2022, should help keep new issue supply at elevated levels. However, the start of tapering by the Federal Reserve at the end of the year and any potential rate hikes in 2022 could hamper year-over-year supply growth.
Key Takeaways
Like this story? Begin each business day with news you need to know! Click here to register now for our FREE Daily E-News Broadcast and start YOUR day informed!