U.S. structured finance new issuance across the four major sectors (asset-backed securities [ABS], commercial mortgage-backed securities [CMBS], collateralized loan obligation [CLO], residential mortgage-backed securities [RMBS]) totaled more than $54 billion in May 2021, bringing the year-to-date (YTD) total to $270 billion, up 63% year over year from $166 billion for the same period a year ago. All four major sectors are ahead of last year's pace, with CLOs leading the way (+141%). CLO refinancings (refis) and resets, which we do not count in the new issue total, are already up to approximately $112 billion, bringing the combined CLO total to $175 billion--easily on pace to break the full-year record of $285 billion. Meanwhile, ABS issuance is up 70%, and our full-year forecast of $220 billion for the sector appears to have some risk to the upside. RMBS is 31% above last year's corresponding period and, after trailing through the first quarter, CMBS is now up 16%. Finally, the structured finance market is likely to build on the 63% advantage over 2020 in June: Last year's issuance was just under $40 billion for the month, well below the average monthly total thus far during 2021.
May Issuance By Major Sector
ABS
ABS issuance was over $27 billion in May. Auto loan and lease ABS totaled $9 billion during the month, esoteric/nontraditional was $5 billion, commercial (equipment, fleet lease, and dealer floor plan) was $900 million, personal loan was $3 billion, and student loan was $6 billion.
CLO
CLO new issuance activity was $13 billion, with refis/resets totaling more than $17 billion. To put the YTD refi/reset volume of $112 billion in perspective (again), the annual record is $167 billion in 2017.
CMBS
Private-label CMBS issuance (not including commercial real estate [CRE] CLOs) was $5 billion in May, including two conduits and seven single-borrower deals. Of some note, the CRE CLO market (not included in our new-issue figures) is already testing the recent 2019 annual highs less than halfway through the year.
RMBS
RMBS issuance totaled nearly $9 billion in May, which included roughly $2 billion in non-qualified mortgage, approximately $4 billion in prime (including prime jumbo) offerings, approximately $400 million in reperforming/nonperforming loan (RPL/NPL), and a couple billion from other types of collateral, including single-family rental, seasoned loans, home equity lines of credit, Fannie Mae mortgage servicing rights, business purpose loans, bridge loans, etc.
Annual Breakdown
Table 1 and chart 1 show a breakdown of U.S. structured finance issuance through May 31, 2021.
Table 1
| U.S. Structured Finance Issuance YTD | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Bil. $) | ||||||||||||||||||||
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2020 YTD | 2021 YTD | 2021F | ||||||||||||
| ABS | 183 | 191 | 229 | 239 | 244 | 193 | 70 | 119 | 220 | |||||||||||
| CMBS | 95 | 69 | 88 | 77 | 96 | 53 | 26 | 30 | 70 | |||||||||||
| CLO | 98 | 72 | 118 | 129 | 118 | 93 | 27 | 66 | 120 | |||||||||||
| RMBS | 54 | 34 | 70 | 95 | 124 | 114 | 43 | 56 | 130 | |||||||||||
| Total U.S. new issue | 430 | 366 | 505 | 540 | 582 | 453 | 166 | 270 | 540 | |||||||||||
| CLO reset/refi(i) | 10 | 39 | 167 | 156 | 43 | 33 | 25 | 112 | N/A | |||||||||||
| CRE CLOs(i) | 5 | 3 | 8 | 14 | 18 | 8 | 3 | 19 | N/A | |||||||||||
| (i)Not included in new issue total. YTD--Year to date. ABS--Asset-backed securities. CMBS--Commercial mortgage-backed securities. CRE--Commercial real estate. CLO--Collateralized loan obligation. RMBS--Residential mortgage-backed securities. N/A--Not applicable. Sources: S&P Global Ratings, LCD/S&P Global Market Intelligence, Bloomberg, Intex, Asset-Backed Alert, and Commercial Mortgage Alert. Note: Figures were rounded after calculations, and may be revised from time to time based on new information. | ||||||||||||||||||||
This report does not constitute a rating action.
| Primary Contact: | Brenden J Kugle, Centennial + 1 (303) 721 4619; brenden.kugle@spglobal.com |
| Secondary Contact: | James M Manzi, CFA, Washington D.C. + 1 (202) 383 2028; james.manzi@spglobal.com |
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