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SF Credit Brief: U.S. Structured Finance Issuance Totaled $57B In August, Rising 65% Year Over Year To $467B

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SF Credit Brief: U.S. Structured Finance Issuance Totaled $57B In August, Rising 65% Year Over Year To $467B

U.S. structured finance new issuance totaled more than $57 billion in August 2021 across the industry's four major sectors: asset-backed securities (ABS), commercial mortgage-backed securities (CMBS), collateralized loan obligation (CLO), and residential mortgage-backed securities (RMBS). August's issuance brought these four sectors' year-to-date (YTD) total to $467 billion--an increase of over 65% from $283 billion a year ago. All four sectors are ahead of last year's issuance pace, with CLOs continuing to lead the way (with a 125% year-over-year increase).

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CLO refinancings (refis) and resets, which we do not count in the new issue total, reached approximately $172 billion in August. August's total brings the combined CLO total to $282 billion, which will almost surely break the $285 billion full-year record over the next month. In addition, after trailing last year's tally through the first quarter, CMBS issuance is now up over 57% year over year, while ABS and RMBS issuances increased 55% and 46% year over year, respectively.

In July, we raised our full-year issuance forecast to $630 billion from our initial forecast of $520 billion due to the stronger-than-expected first half issuance, with all four major sectors contributing to our revised expectation (see "Global Structured Finance Midyear Outlook 2021: Issuance Forecast Raised To $1.4 Trillion," published July 20, 2021).

Sector Breakdown

ABS

ABS issuance totaled $20 billion in August. Of this amount, auto loan and lease ABS was $9 billion, esoteric and nontraditional was $6 billion, student loan was over $3 billion, and credit card and personal loan each tallied approximately $1 billion apiece (slight differences in totals may exist due to rounding).

CLO

CLO new issuance reached approximately $19 billion in August, and refis and resets totaled $17 billion. The monthly new issuance was a record. Speaking of records, the YTD refi and reset issuance volume of $172 billion already eclipsed the annual record of $167 billion set in 2017.

CMBS

Private-label CMBS issuance, excluding commercial real estate (CRE) CLOs, totaled roughly $5 billion in August. The issuance included two conduits for $1.6 billion and six single-borrower transactions accounting for $3 billion. The single-borrower sector has been extremely active this year, accounting for more than two-thirds ($38 billion) of the total private-label CMBS (excluding CRE CLOs) issued. In addition, with nearly $2 billion of issuance in August, conduits now total more than $18 billion. After the five CRE CLOs issued in July, a single transaction of $653 million priced in August, bringing the YTD total to $25 billion.

RMBS

RMBS issuance totaled $14 billion in August. This included roughly $3 billion in prime (including prime jumbo) offerings, $2 billion in nonqualified mortgage, and $2 billion in single-family rental. The remainder comprised modest offerings from other types of collateral, including agency eligible loans, investor loans, reperforming loans, nonperforming loans, and real estate owned.

Annual Breakdown

The table below shows a breakdown of U.S. structured finance issuance through Aug. 31, 2021.

Table 1

U.S. Structured Finance Issuance YTD
(Bil. $)
2015 2016 2017 2018 2019 2020 2020 YTD 2021 YTD 2021F
ABS 183 191 229 239 244 193 126 195 260
CMBS 95 69 88 77 96 53 35 56 80
CLO 98 72 118 129 118 93 49 110 140
RMBS 54 34 70 95 124 114 73 106 150
Total U.S. new issue 430 366 505 540 582 453 283 467 630
CLO reset/refi(i) 10 39 167 156 43 33 25 172 NA
CRE CLOs(i) 5 3 8 14 18 8 6 25 NA
(i)Not included in new issue total. ABS--Asset-backed securities. CMBS--Commercial mortgage-backed securities. CRE--Commercial real estate. CLO--Collateralized loan obligation. RMBS--Residential mortgage-backed securities. YTD--Year to date. NA--Not available. Sources: S&P Global Ratings, LCD/S&P Global Market Intelligence, Bloomberg, Intex, Asset-Backed Alert, and Commercial Mortgage Alert. Note: Figures were rounded after calculations, and may be revised from time to time based on new information.

This report does not constitute a rating action.

Primary Contact:Brenden J Kugle, Centennial + 1 (303) 721 4619;
brenden.kugle@spglobal.com
Secondary Contact:James M Manzi, CFA, Washington D.C. + 1 (202) 383 2028;
james.manzi@spglobal.com

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