Rates are easing from restrictive levels, issuance windows are open, and global policy debates on capital and disclosure remain active. That backdrop defined many of the conversations we had at ABS East this year.
Across many sessions, panelists compared carry against spread volatility, assessed real-economy credit, and looked for practical ways to raise reporting quality and close cycles faster.
From a trustee and agent standpoint, we believe there was a common thread: timeliness, accuracy, transparency, and control across the life of a deal. Here’s how we saw that play out within core areas of asset-based finance.
1. CLOs: active market, sharper manager dispersion
Issuance remains healthy, but results vary widely across managers. The ability to reset or refinance depends on how cheaply top tranches can be sold, how the rest of the structure stacks up, and how much reinvestment time remains. Terms like reinvestment length, credit limits, and loan quality now matter as much as overall volume.
But keep in mind that each reset or refi brings new consent flows, revised waterfalls, and potentially tighter cutovers. Investors and trustees alike are focused on clean modeling, accurate cash reconciliations, and reports.
What we’re watching
- Will resets and refis still create value once fees and timing costs are included?
- How might tariffs or other credit concerns affect ratings and CLO issuance in 2026?
- Where are lower-rated holdings building up, and how does that affect investor comfort?
- Which data standards make collateral reporting more consistent across managers?
2. CRE bifurcation, with operations in the spotlight
Office exposure remains under pressure, while multifamily and logistics assets are holding up. Many sponsors are extending loans or reworking business plans, requiring stronger oversight and data discipline.
In this context, clean and current property-level data helps investors assess cash-flow health more quickly. Consistent modification packages and clear waterfall treatment reduce confusion and disputes later.
What we’re watching
- Which extension structures truly protect value for both borrowers and investors?
- How quickly does updated property data reach investor reports?
- What patterns are emerging in reconciliation breaks, and how can deal setups prevent them?
3. Consumer credit: BNPL steps into focus
Consumer credit performance remains broadly stable, but Buy Now Pay Later (BNPL) emerged as the most closely watched trend. On the “Buy Now, Performance Later? Non-Bank and Online Lending” panel, we discussed how this sector is maturing.
BNPL lets consumers split purchases into short, fixed-term payments instead of revolving card debt. It now accounts for tens of billions in annual originations. Because most lenders operate through Banking-as-a-Service partnerships, regulatory attention is increasing. There is now a push for clearer disclosure of pricing, data use, and consumer protections, as rate caps and transparency rules evolve.
Funding sources also remain mixed, including warehouse lines, forward-flow sales, and a growing ABS pipeline. Performance diverges across borrower tiers, with prime borrowers proving steadier than non-prime cohorts.
A key operational topic was backup servicing, given the rapid growth and short duration of BNPL loans. High transaction volumes require servicers and trustees to plan for continuity so that payment data can transfer smoothly if an originator exits the market. Establishing reliable data handoffs and scalable systems is becoming as critical to investor confidence as the credit metrics themselves.
What we’re watching
- How fast BNPL usage matures—steady growth or a cooling phase?
- How regulators define and enforce disclosure and pricing standards.
- How performance gaps evolve across borrower profiles.
- Whether warehouse and ABS funding structures converge around shared data standards.
- What servicers and trustees can do to strengthen contingency and backup frameworks.
4. Residential credit as the liquidity valve
Homeowners are drawing on built-up equity again through HELOCs, second mortgages, and innovative shared-equity products. These tools have become key release valves as refinancing remains unattractive in a higher-rate environment. Shared-equity programs in particular are expanding, but they depend on clear valuation rules and transparent payout mechanisms when homes change hands.
However, operational discipline remains central. We would emphasize the importance of complete documentation, validated liens, and consistent modification tracking to maintain predictable cash flow. In all cases, reliable data and coordination among servicers, custodians, and trustees ensure that these structures remain investable at scale.
What we’re watching
- Will home-equity products sustain momentum as rates ease?
- How are servicers handling lien validation and modification reporting?
- What valuation methods will gain consensus in shared-equity deals?
5. Bank capital and SRT as a structural tool
Banks are turning to synthetic risk transfer (SRT) to manage capital while continuing to lend. As this trend progresses, investor interest is deepening, but deal terms are only gradually standardizing.
We believe future success depends on precision, including clean reference pools, reliable calculations, and transparent communication when triggers are met.
What we’re watching
- Which SRT templates become market norms in the U.S.?
- How can participants monitor pool performance and trigger events more efficiently?
- Where can trustee and agent roles streamline the notice and payment process?
6. Digital infrastructure and energy transition move into the core
Digital and clean-energy assets are shifting from specialty niches to repeat issuance programs. Data-center and fiber deals are growing as investors grow comfortable with long-term revenue contracts and concentration data. Property Assessed Clean Energy (PACE) financing continues to mature, and solar securitizations are gaining scale as reporting on energy output, warranties, and installer performance becomes more standardized.
We believe these sectors underscore the value of standardized disclosures and data sharing. Reliable operational information allows investors to compare counterparties, evaluate risk exposure, and streamline monitoring. As volumes increase, efficient onboarding and automation will be crucial to maintaining high reporting quality without adding manual overhead.
What we’re watching
- How disclosure templates evolve to capture tenant and counterparty concentration.
- Whether property-level data automation reduces friction in PACE reporting.
- How renewable-asset reporting aligns across sponsors and servicers.
7. AI, analytics, and automation: from pilot to production
AI has moved from theory to practice. Financial firms and key stakeholders in the global markets now use it for intake, portfolio analysis, error detection, and payment-flow testing—and focus on measurable results rather than hype.
On the “AI, Analytics & Automation” panel, participants described how AI developments may impact multiple aspects of the securitization lifecycle, from origination, structuring, and due diligence to modeling, servicing, and cash flow management. Integration across lender, issuer, servicer, and trustee systems is reducing handoffs, shortening close cycles, and cutting error rates. Legal practitioners are also leveraging technology with the intention of providing better and more responsive service to clients.
What we’re watching
- Which AI use cases deliver real efficiency without sacrificing oversight?
- How model governance and explainability evolve as adoption scales.
- What data-sharing standards enable smooth automation between market participants?
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