This week in charts
Mortgage rates
Income sources for retirees
Maturity wall
U.S. high yield credit spreads
S&P 500 market cap
Tech stocks
Lost decades
Gold
Largest car exporters
Yield change after first rate cut
Cars, Planes and Restaurants Boost Asset-Backed Debt Sales to Highest Since Financial Crisis
Sales of debt backed by everything from auto loans to airplane leases to Subway franchise fees have hit their highest level since the financial crisis, as banks try to meet new capital rules and insurance companies clamor for higher-yielding debt.
The heavy issuance partly stems from banks offloading loans from their books ahead of new capital rules, bundling the debt into bonds they can sell to investors. The firms could be required to start implementing Basel III endgame rules next year, which in many cases require them to pare back risk and fund loans with more capital, cutting into potential returns.
Investors, including insurance companies, are eager to buy asset-backed debt now and their demand has helped drive issuance. As Baby Boomers retire, they’ve been buying record volumes of annuities from insurers to fund their retirement. In turn, insurers putting the products together are looking to fund them with bonds offering relatively high yields, low credit risk, and longer durations.
Investors have flocked to exotic asset-backeds in particular — bonds supported by music royalties, revenue from data centers and cell towers, among other cash flows, instead of more conventional collateral like credit card debt. Sales of exotic ABS have jumped to about $89 billion, up from $54 billion around this time last year, data compiled by Bloomberg shows.
This week fun finds
EdgePoint’s favourite little monsters
15 Fun Ways to Use Up Leftover Halloween Candy
Kids finish digging through their bags of loot? Here's what to do with the rest.
