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Asset Backed Securities Market Trends

Report ID: GMI9550
Published Date: May 2024
Report Format: PDF

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Asset Backed Securities Market Trends

The rising issuance of green and sustainable ABS is driving the asset backing securities industry by attracting environmentally conscious investors and fulfilling Environmental, Social, Governance (ESG) mandates. For instance, in December 2021, Flexential, a prominent provider of data center colocation and cloud connectivity services, completed the largest single asset-backed securities issuance in the data center industry, which included a large green data center with asset-backed securities financing feature. The company issued these green notes under its new Green Finance Framework, setting a new standard for green eligibility in the data center sector.

Growth in non-traditional asset classes is propelling the asset-backed securities industry by diversifying the types of assets available for securitization such as fintech loans, royalties, and renewable energy projects. This expansion attracts a broader range of investors seeking varied and high-yield investment opportunities. Additionally, it encourages financial innovation and enhances market resilience by reducing dependency on traditional asset classes. The increasing acceptance of new asset classes will drive overall growth and liquidity in the market.

Authors: Preeti Wadhwani

Frequently Asked Questions (FAQ) :

The market size of asset backed securities reached USD 1.2 trillion in 2023 and will grow at over 8% CAGR between 2024 and 2032, led by the rise in current-dollar personal consumption expenditures.

The financial institution issuer type segment held over 37% share in 2023, as it benefits from access to capital, and borrowing capabilities to originate and package diverse assets.

North America market accounted for 27% revenue share in 2023, driven by the increasing demand for various forms of consumer credit, such as auto loans, which has provided a steady supply of underlying assets for securitization.

Bank of America Merrill Lynch, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Toyota Motor Credit Corporation, and Wells Fargo among others.