Kroll Bond Rating Agency (KBRA) releases its RMBS 2019 Outlook. In this report, KBRA recaps some of the highlights of the 2018 RMBS 2.0 PLS market and comments on the themes we expect to shape the market over the coming year. KBRA also reviews and presents updates to issuance volume trends and forecasts, spreads, and collateral performance trends.
- 2018 Issuance Volume: RMBS 2.0 issuance for 2018 is expected to end just shy of $50 billion a 63% increase over 2017 with Q4 2018 expected to exceed $10 billion in issuance alone.
- 2019 Issuance Expectation: KBRA expects RMBS 2.0 issuance volume in 2019 to be comparable to issuance levels of 2018, but with more potential risk to the downside as compared to 2018.
- 2018 Recap: The RMBS 2.0 market in 2018 can be generally characterized by the number of new entrants and new deal features introduced as it continues growth spurred by a mostly attractive spread environment favoring PLS issuance vs. whole loan sales (including sales to GSEs).
- 2019 Themes: KBRA believes the RMBS 2.0 market will face greater uncertainty in 2019 than in 2018 as some headwinds have grown (e.g. decreases in affordability metrics and spread widening though many prominent tailwinds remain (e.g. homeowner equity, unemployment & GDP levels).
To view the report, please click here.
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
Kahan, Managing Director
Mahdavian, Senior Director
Gervais, Senior Director