So far this year, $66 billion of new deals have been issued in the ABS market. The prime auto loan ABS sector makes up 25% of total volume, while the combined auto ABS sectors represent 57% of total volume. Meanwhile, student loans comprised 21% of the total loan volume, according to Bank of America Merrill Lynch figures.
BofA Merrill analysts expect a total of $25 billion of student loan ABS to be issued this year, up by an extra $5 billion from their original forecast for the sector.
They also anticipate that volumes for credit card ABS to decrease by $5 billion to total $10 billion for 2011. Analysts still expect gross issuance of $120 billion and a negative net volume of $45 billion.
"Volume in the student loan sector should benefit as lenders look to move funding from the ABCP program established by the Department of Education, Straight-A Funding, to the term ABS market," analysts said. "The expectation of limited growth in receivables and utilization of alternative funding sources continues to limit new issuance volume in the credit card sector."
The student loan ABCP program funds about $35 billion of Stafford and PLUS loans. Sallie Mae funds around $24 billion through the program. According to analysts, these loans were originated between 10/1/03 and 7/1/09 and 47% are in repayment so the average lives of any related term ABS should be relatively short.
Analysts also noted that despite lower- than- expected vehicle sales for the past few months, the auto sector should meet their expected volume of $65 billion.