According to S&P Global Ratings’ mid-year report on structured finance, there was an 18% increase to roughly $500 billion in global structured finance issuance year-over-year in the first six months of 2018.

The U.S., China and Europe all recorded considerable growth, while Canada was up slightly and Japan was relatively unchanged. Australia and Latin America experienced declines. Overall, moderate economic growth and low rates were a tailwind for issuance in the first half of the year. S&P noted that there could be headwinds from geopolitical uncertainty in the second half of the year, but continues to forecast approximately $1 trillion of global securitization by the end of the year.

Key regional trends:

• In the U.S., issuance was up 16%, with all four major sectors (ABS, RMBS, CMBS, CLO) reporting year-over-year gains. The exception was credit card ABS which saw a slowdown from last year.
• Canadian ABS saw a significant uptick – primarily in the loan segment – as cross-border issuance remained on par with 2017.
• In Latin America, while real GDP growth is up in most countries, falling currencies, tighter financing conditions and political uncertainty are putting pressure on securitization
• In Europe, S&P noted healthier issuance volumes – up 30% year-over-year – against a backdrop of steadily increasing regulatory certainty.
• Chinese securitization issuance continues to boom thanks to RMBS; however, more-stringent regulations could moderate issuance levels.