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S&P: Structured finance issuance poised to top $1 trillion for 3rd straight year


According to Market Intelligence, February 2023


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S&P: Structured finance issuance poised to top $1 trillion for 3rd straight year

Structured finance issuance across the globe is on track to top $1 trillion for the third consecutive year in 2020, though risks are tilted to the downside, S&P Global Ratings said in a report.

In 2019, global new issuance rose to $1.140 trillion from $1.050 trillion in 2018. New issue volumes rose in the U.S., China, Australia and Latin America and were down in Europe, Japan and Canada.

In 2020, issuance volume is forecast to reach $1.120 trillion, with all covered regions likely to log volumes close to last year's figures, according to the rating agency.

S&P Global Ratings had previously forecast global issuance volume to reach $1.092 trillion this year.

"[O]ur baseline macroeconomic view is broadly neutral, but with risks weighted to the downside a precarious balance," the agency said in the report. It cited global trade tensions, Brexit uncertainty, an unexpected monetary policy tightening and market volatility as factors that could have "knock-on effects" for global issuance.

New issuance in the U.S. is projected to drop to $560 billion in 2020 from $582 billion last year. S&P Global Ratings attributed this to an expected decline in collateralized loan obligation issuance.

In Europe, issuance is projected to reach €100 billion this year, compared with €102 billion in 2019. Canadian issuance is projected to hit C$20 billion, compared with C$19 billion in 2019.

Asia-Pacific total issuance is estimated to drop to $416 billion from $420 billion amid an expected decline in Chinese issuance. New issuance in Latin America is forecast to rise to $15 billion from $13 billion.