SFA Market Snapshot – June 1, 2023

SFA’s Market Snapshot looks at the $115 million of funding that the ABS market has provided to consumers and businesses in 2023 and $1.2 trillion since 2019. The top asset classes of ABS supply are bonds backed by auto loans and leases (42%), credit cards (12%), student loans (7.7%), equipment loans and leases (7.5%), and unsecured consumer loans (5.8%). The remaining 25% is backed by a myriad of financing instruments — future cash flows of music royalties, PACE loans for green building renovations, loans to small businesses, and aircraft and container leases. These esoteric ABS, which tend to have higher yields, can be attractive to investors in a stable economy, but may experience a drop in demand during periods of economic uncertainty if investors become more risk-averse. Read More.