Global Structured Finance Mid-Year Outlook 2021: Emissions Forecast Increases to $ 1.4 Trillion

Global Structured Finance Mid-Year Outlook 2021: Emissions Forecast Increases to $ 1.4 Trillion

By region, the U.S, Europe, China, Australia, and Latin America saw considerable year-over-year gains during the first half, while Japan posted modest growth and Canada saw declines (see table 1 and the sections below for more details). Global structured finance new issuance volume increased 60% year over year to approximately $685 billion in the first half of 2021. New issuance volume also increased 30% compared with the same period in 2019. The robust growth reflects the ongoing recovery from the COVID-19 pandemic and higher-than-expected economic growth, as well as low available yields and low benchmark rates driving demand for structured finance products. As a result, we increased our 2021 global full-year issuance forecast approximately 15% to slightly over $1.4 trillion, which would comfortably exceed the previous $1.15 trillion high set after the Great Recession in 2019.

Global Securitization Structured Finance Issuance(i)

We believe conditions remain favorable for structured finance issuance through year-end as the recovery from the pandemic progresses. The negative effects of the pandemic appear to be subsiding in most structured finance markets, but new variants and infection waves pose credit and issuance risks. Structured finance ratings have held up relatively well overall, even though the aggregate ratings migration turned negative (especially for CMBS, which was the worst-affected sector). Corporate and commercial real estate credit performance metrics also deteriorated but are now bouncing back. Meanwhile, consumer credit performance has been more benign, though ongoing policy support could be masking underlying pressures. For more detail, see “2020 Annual Global Structured Finance Default And Rating Transition Study,” published May 13, 2021, and “Global Structured Finance: Charting The Recovery From COVID-19,” published June 14, 2021.

Forecasts

Six months ended June 30

Full-year

2021 (updated)

2021

2021 (original)

2020

2019

2020

2019

2018

2017

U.S. (bil. US$)(ii)

2016

520

630

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