This market research report presents a comprehensive segmentation of the global structured finance market by types (ABS, CDO, and MBSand by geography (Americas, Asia, Europe, and ROW). The key vendors analyzed in this report are Bank of America Merrill Lynch, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan Chase, Morgan Stanley, and UBS.
Technavio’s market research analysts estimate the global structured finance market, to grow at a CAGR of 16% between 2016 and 2020. Structured finance helps in the pooling of economic assets such as bonds, loans, and mortgages, as well as in the issuing capital structure of claims or tranches that are prioritized against the pool of collateral assets. Europe is the largest market for structured finance, accounting for 64% of the total market share. The European Central Bank is pumping liquidity into the market to minimise the pressure on issuers and to boost funding in the mortgage, auto, and credit card markets.
The new market research report from Technavio provides a breakdown and analysis of the structured finance segments by technology.
“Vendors are offering portfolio risk solutions, which provide real-time pricing and capital management of multi assets portfolio. These solutions would help finance professionals to offer information to produce cash flows and analytics at the portfolio level. This process of pricing securities will help manage individual portfolios and avoid firm-wide risks through consistency, automation, and transparency,” says Bharath Kanniappan, Lead Analyst, Industrial Automation, Technavio Research
The assets-backed securities (ABS) segment dominates the market, occupying around 37% of the total market share. ABS products improve the efficiency of the resource allocation such that there are more liquid securities and better risk sharing. The formulation of outright purchases by the ECB would revamp the corporate loans market and also revitalize the credit market through the securitization process.
Global ABS market 2015-2020 ($ billions)
Source: Technavio, 2016
The key vendors in the global structured finance market include Bank of America Merrill Lynch, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan Chase, Morgan Stanley, and UBS. Several sponsors and corporate borrowers are taking control over potential lenders to avoid the consent rights risk. Borrowers will get a higher leverage at low cost from the facilities provided by the asset-backed lending. The credit enhancements will help in the avoidance of the interest risk mismatch. The sale of receivables to a special purpose vehicle will help in recovering back the capital amount in case of bankruptcy.
A more detailed analysis is available in the Technavio report, Global Structured Finance Market 2016-2020.
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