ABS

Exposure to synthetic securitizations has more than doubled over the last two years, swelling to C$86.6 billion ($64.2 billion) at the end of the last financial year, from C$40.3 billion in 2022.

Treasury yields retreat from 2024 highs with month-end in view

Two trusts, the Sunnova Sol VI 2024-1 Issuer and the Sunnova Helios XIII, 2024-A will issue the notes, both with Atlas SP at the helm.

Time Investment Company, a first-time issuer, offers loans that mostly finance home water treatment systems, and its customers approach prime quality.

Kobalt's notes benefit from an overcollateralization level of 35%, and a debt service reserve account initially sized to cover six months of fees and interest on the notes.

The deal has a relatively high exposure to commercial and industrial customers. Non-residential ratepayers account for 55% of its customers and about 47% of its revenue.

Like a growing number of auto ABS deals, the pool has more battery electric vehicles, which represent 10.6% of the pool, compared with 3.8% on the previous deal, FCAOT REV 2023-1.

The risk that inflation could remain stuck above their 2% target is guiding Fed officials' preference to keep interest rates where they are for now, even as investors have clamored for cuts.

Consumer obligors represent a slight majority of the pool, 54%, while loans to commercial obligors represent the remaining 46%.

Just one previous transaction had experienced a loss, the rating agency said. That was the ARI 2021-A, and that transaction experienced a loss of just 0.02%.