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KBRA Releases Midyear 2018 ABS Outlook: Strong and More ResilientKroll Bond Rating Agency (KBRA) releases Midyear ABS (News - Alert) Outlook: Stronger and More Resilient. Entering 2018, ABS credit fundamentals were strong, volatility was low, and spreads were on a two-year tightening trend. However, we were reminded this spring that volatility does indeed exist, as events throughout the first half of the year caused risky assets to sell-off on multiple occasions. For the most part, the ABS market held its ground each time, outperforming almost all other parts of the fixed income markets year-to-date. As we look forward to the second half of 2018, we believe there is a lot to like. ABS credit fundamentals are strong, if not stronger, than they were at the start of the year. The labor markets have continued to tighten, and the financial condition of the average U.S. household is remarkably healthy. However, back in December we said that any catalyst for ABS spread widening will most likely to be driven by macro factors, rather than ABS credit concerns. With the ever-increasing prospect of a U.S. trade war(s), heightened political uncertainty across the Eurozone, the potential for a central bank policy miss, and countless other risk-off catalysts sitting in plain sight, we believe this rings truer today than it did just six months ago. The ABS markethas been quite resilient up to this point, but is certainly not immune to a prolonged risk-off environment. To view the report, please click here. CONNECT WITH KBRA
Twitter About KBRA and KBRA Europe KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
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