Consumer Loan ABS Market Is Navigating An Uneven Rebound NASDAQ
By Anusha Shrivastava, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- By some measures, the market for consumer asset-backed securities has largely recovered from its near-fatal crash. But a peek under the hood shows that some parts of the market remain stalled. Auto-loan securities are doing well, but credit cards have slowed to a trickle, even compared with 2009.
A sputtering economy has damped the enthusiasm of issuers and investors, and is likely to keep total issuance this year around $140 billion, about half the level of precrisis years. Changes in accounting rules and disclosure requirements also weigh on the market as they will increase the cost of securitization for issuers and the cost of borrowing for consumers.
"Clearly, issuance will be down this year," said Randall Bauer, senior portfolio manager in the structured-products group at Federated Investors in Pittsburgh. "The consumer is weak and there's less production of securitizable assets."
