The ABS market’s return in the US
features a healthy dose of caution. But growing confidence and
the appearance of new structures begs the question: have we
been here before?
The financial crisis have dried up the US asset-backed
securities (ABS) market, but deals are returning. The backlog
of new regulation is now beginning to clear, injecting needed
clarity and building market confidence.
The blame for the financial crisis mostly fell on
mortgage-backed securities (MBS), particularly residential MBS
(RMBS), which has led to increased regulation – some
of which has not yet been finalised. But while RMBS is yet to
make a strong recovery, other forms of ABS have come back to
market and are being joined by new asset classes.
"Right now feels like the end of 2005," says Stuart Litwin,
a Mayer Brown partner based in Chicago. "There's a general
level of optimism, and people feel they can...