What are the main catalysts for securitizations?
Under what circumstances do we see an increased number of RMBS and ABS transactions? What are the main factors driving the process ?
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I only have tangential experience with ABS deals, primarily securitization of auto loans, so please correct me if I'm misunderstood.
Idk specifically about RMBS, but the ABS market for auto loan securitization was very active over the last few years given elevated vehicle prices, easy financing, and pent up demand. I would think RMBS transactions would heat up during a strong housing market? So, likely would need some combination of lower interest rates, a strong consumer, and high housing prices, among other factors that affect the housing market.
I think the strength of the consumer is very important because that is who is paying the underlying cash flows (except maybe unique ABS transactions like aircraft leasing).
Yes, it makes absolute sense. I guess it explains why the housing bubble was the golden age of securitisations.
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