Credit performance remained strong across most U.S. structured finance sectors in 2013 and the outlook for 2014 calls for more of the same. High credit quality collateral is again expected to underpin solid performance metrics and ratings stability for new issues across the core structured finance sectors ABS, CMBS, CLOs and RMBS. These better optics, however, still need to be viewed in the context of legacy RMBS, CMBS, and CDO transactions, which account for the vast majority of negative Fitch Rating’s rating outlooks.
Structured finance rode the strong credit and performance and a favorable funding environment to issuance gains again in 2013. CMBS and CLO issuance reached post-crisis highs while ABS maintained a consistent pace. RMBS experienced modest growth despite constraining market and policy factors. Fitch expects the pace of structured finance issuance growth overall to moderate in 2014 given a number of external factors on the regulatory, policy and political fronts.