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S&P: Global securitization issuance on track to top $1 trillion in 2019

Global securitization issuance remains on track to surpass US$1 trillion this year, despite a recorded softness in the Chinese market in the third quarter, S&P Global Ratings said in an Oct. 16 report.

Total new issuance reached US$770 billion in the first nine months of 2019, compared with US$750 billion in the year-ago period. S&P Global Ratings maintained its global new issuance forecast of US$1.035 trillion for this year, nearly matching the level seen in 2018 when new issuance reached US$1.040 trillion.

The Chinese securitization market slowed in the third quarter as issuance fell 8.7% year over year, its first annual drop for years, mainly due to a decline in residential mortgage-backed securities and corporate receivables securitization. Still, Chinese new issuance in the first nine months of the year rose to US$204 billion from US$176 billion owing to favorable interest rates.

For full year 2019, the rating agency revised its new-issuance projection for China downward to about US$300 billion from a prior estimated range of US$330 billion to US$340 billion, citing the softening RMBS issuance and a weaker yuan.

In the U.S., total new issuance reached US$409 billion in the nine months to September, virtually unchanged from the year-ago period.

European new issuance for the nine months through September fell 12% year over year to 68 billion from 77 billion following regulatory uncertainties at the start of 2019.

In Canada, new issuance fell to C$14 billion in the first three quarters of the year from C$18 billion a year ago. Latin America's securitization market slightly improved as total new issuance rose to US$11 billion from US$7 billion.