The structured finance market should produce $860 billion in new issuance by yearend, with growth in all four major sectors of the market — asset-backed securities (ABS), residential and commercial mortgage-backed securities (CMBS), and structured credit.
New securitization volume should surpass 2024 business by 16%, after getting a boost from consumer asset-backed securities (ABS) classes, powered by fintech originations, Kroll Bond Rating Agency analysts said during its 2026 outlook presentation with media outlets.
The rating agency forecasted that the industry could do $948 billion in new business in 2026.
Analysts forecast that new issue volume supported by revenue from retail auto loans and leases, composed of prime and non-prime assets, will end the year $123.5 million. Auto ABS will be the most productive sector by far, according to KBRA, which also cited Bloomberg data.
Analysts already have a positive outlook for 2026, beginning next week when the Federal Open Markets Committee convenes and when market participants expect a rate cut. If credit loosening continues into 2026, that should support even more issuance, according to the rating agency.
The coming year will not be without its challenges, however, analysts said. Subprime quality borrowers will face pressures from persistent inflation and other economic headwinds, said Rahel Avigdor, a managing director of consumer ABS.
Net delinquency and losses for prime assets are expected to be stable or slightly weaker in 2026, and likely plateau for subprime assets, according to analysts. There should be more divergence with recovery rates, though, which have trended higher in the last three years, according to analysts.
It is a good story that seems to be the case across the market.
Unsecured consumer ABS on secure footing
Unsecured consumer loans, solar and home improvement loans appear to consistently perform on the same level, according to Avigdor.
"There, we don't have the segmentation between prime and subprime," Avigdor said.
One trend does seem to be emerging, she said, which is that tighter underwriting standards is starting to reverse some performance deterioration that started after 2020.
"It is a good story that seems to be the case across the market, not just one particular issuer," she said. "We expect that we'll see a decline in losses and delinquency [rates]."
Single-borrower takes the lead in CMBS
The commercial mortgage-backed securities (CMBS) sector is expected to complete $155 billion in new deals by yearend. Issuance across the three main sectors achieved a 38% year-over-year increase, said Robert Grenda, a managing director overseeing CMBS surveillance and research.
Single-borrower loans drove that volume, with $92 billion in new securitizations, replacing conduits as a mainstay of the sector.
"There's been very, very strong investor demand for the single-borrower property type," Grenda said. He added that KBRA expects that momentum to build in 2026 and 2027, with 12% and 14% increases, respectively.
