Macro & Market Views

Securitization in Focus - July 2026

Securitization in Focus - July 2026

Headlines

Earnings for Asset-Backed Securities (ABS) Issuers Offer a Window Into Market Trends.1

  • American Express. Spending growth accelerated, fueled by a 10% increase in travel and entertainment and a 13% increase in retail spending. As expected, expenditure on gas increased but accounted for only about 2% of total billings. Management noted no evidence of a broader macroeconomic slowdown.
  • Bread Financial. Loan growth expected to increase by low-to mid-single digits, an improvement from prior guidance of low-single digits. Full-year net loss guidance shifted to 7.0% to 7.1%, an improvement from the prior guidance of 7.2% to 7.4%. The improving credit outlook reflects credit risk management, underwriting and the continued maturation of higher-quality new accounts.
  • Capital One. Growth was driven by an increase in open accounts and higher spending per customer. Purchase volume among legacy clients grew roughly 14% year over year. Modestly higher net charge-offs in the auto portfolio were attributed to the subprime mix returning to pre-pandemic levels.
  • Synchrony Financial. Purchase volume increased by roughly 8% year over year, driven by higher spend per active account and the expansion of partner programs. Period-end loan receivables increased by 2.4% year over year, despite payment rates remaining 70 basis points higher year over year at 17%.

Data center issuance remains strong. While hyperscale facilities represent most ABS collateral, colocation data centers remain an important part of the sector and have been less affected by recent negative headlines surrounding hyperscale. Recently issued hyperscale ABS traded flat to slightly cheaper over the past few weeks but remain at or above their issuance pricing levels.2

Data center corporate investment grade spread levels (difference between yield on risk assets versus comparable duration Treasury) are 25 to 55 basis points wider (cheaper) over the past two weeks and remain wider than their issuance levels. Issuance continues in the broader data center market with $17 billion in securitized deals so far this year, $26 billion in corporate debt and $36 billion in the high yield corporate sector.3 

 

Exhibit 1. Spreads continue to fluctuate based on changing geopolitical and interest rate environment (in basis points)

 Credit Card Asset-Backed SecuritiesAuto Asset-Backed SecuritiesNon-Agency Commercial Mortgage-Backed SecuritiesAgency Residential Mortgage-Backed SecuritiesInvestment Grade CorporatesHigh Yield Corporates
Dec 31 202532.553.7121.021.877.4268.1
Jan 31 202631.148.8111.715.772.5263.6
Feb 28 202629.949.3113.620.983.7292.8
Mar 31 202632.453.9119.123.988.7320.2
Apr 30 202632.451.6113.321.379.4274.7
May 31 202629.947.2108.922.071.3256.2
Jun 30 202626.244.3109.524.573.5264.4
Jul 31 202625.142.9110.831.077.8279.4
       
YTD Minimum23.741.5106.013.870.6247.7
YTD Maximum34.256.4121.031.092.7338.1
YTD Average29.949.0112.521.421.4273.9
10-year Minimum16.224.169.47.070.9249.6
10-year Maximum263.1378.3347.9132.3373.11,100.0
10-year Average40.759.6123.537.4110.5373.4

Source: Bloomberg; data as of July 31, 2026.

Asset-Backed Securities Issuance4

Issuance in 2026 reached $200 billion by the week of July 6 (week 28), the fastest pace among the top 11 periods and two weeks ahead of the previous record set in 2024.

Issuance has accelerated meaningfully versus recent years, reaching the $200 billion milestone 11 weeks earlier than 2021 and 13 weeks earlier than 2019.

The strong pace of issuance extends the post-2023 recovery, with both 2024 and 2025 ranking among the fastest years on record to reach $200 billion.

Exhibit 2. 2026 ABS Issuance Reaches $200 billion in Record Time
Year to Date Through July 31, 2026

Source: Deutsche Bank; data as of July 31, 2026.

 

Exhibit 3. Asset-Backed Securities Issuance is Running Ahead of Historical Periods 
Issuance in Billions of US Dollars, 2024 through Year-to-Date 2026

Source: Deutsche Bank; data as of July 31, 2026.

 

Exhibit 4. Breakdown of Asset-Backed Securities Issuance Year to Date

Source: Deutsche Bank; data as of July 31, 2026.

Commercial Mortgage-Backed Securities (CMBS) Issuance5

Year-to-date private-label CMBS issuance surpassed $100 billion by July 31, six weeks earlier than the previous record pace set just last year.

Since 2010, the $100 billion CMBS issuance mark has only been reached five times, ultimately generating $112 billion to $156 billion of total annual issuance.

Five-year loans represent roughly 80% of 2026 year-to-date conduit issuance, replacing 10-year loans as the market standard.

Borrowers have preference for short-term flexibility amid elevated rates and refinancing uncertainty.

Exhibit 5. Private Label CMSB 2.0 Issuance at Record Pace
Year to Date Through July 31, 2026

Source: Deutsche Bank; data as of July 31, 2026.

Commercial Mortgage-Backed Securities Delinquencies in July6

Year over year, CMBS delinquency rates have increased by 63 basis points (7.23 % to 7.86%).

The percentage of loans that are seriously delinquent (60+ days or more) increased from 7.16% to 7.57% in July.

The five largest newly delinquent loans in July accounted for $2.6 billion of the $6.0 billion in newly delinquent balances, or roughly 44%. Properties included a showroom and exhibition-space portfolio split between North Carolina and Nevada, two Times Square properties in New York, a Chicago office tower and a Seattle office portfolio.

By property type level

  • Multifamily. +46 basis points to 7.69%, due to a series of multifamily loans hitting 30 days delinquent in Ohio, Texas and New York.
  • Office. +34 basis points to 11.91% with large loans in Chicago, Seattle and Virginia moving to non-performing and delinquent, slightly offset by the resolution of two downtown Los Angeles locations.
  • Lodging. +13 bps to 5.35%, reversing the improvement from June as new hotel delinquencies were ahead of the small number of resolutions in the sector.
  • Retail. +5 bps to 6.96%—has now notched three consecutive months of increases.
  • Industrials. Lone bright spot with delinquencies dropping 7 basis points to 1.13%.

 

Exhibit 6. Overall delinquencies jump 51 basis points to 7.86%, extending monthly volatility. 
CMBS Delinquencies—30+ Day Delinquencies (%)

Source: Trepp; data as of July 31, 2026.

Non-Agency Residential Mortgage-Backed Securities (RMBS)7

Non-agency RMBS issuance remained strong in July, totaling $18.8 billion—roughly in line with the average monthly pace so far this year. Year-to-date issuance reached $131.6 billion, well ahead of comparable prior-year levels.

Non-qualified mortgage securities continued to dominate issuance, accounting for approximately 49% of July volume, consistent with their year-to-date share. Non-QM loans offer greater flexibility in borrower eligibility and documentation requirements than mortgages meeting Consumer Financial Protection Bureau standards.

Second-lien and home equity line of credit issuance reached $24 billion year to date, marking the strongest pace since the financial crisis and positioning the market to surpass last year’s $29 billion total, the second-highest annual level on record.

Exhibit 7. Non-Agency RMBS Issuance
Issuance in Billions of US Dollars, Year-to-Date 2026

Source: Deutsche Bank; data as of July 31, 2026.

 

Exhibit 8. Breakdown of RMBS Issuance
Year-to-Date 2026

Source: Deutsche Bank; data as of July 31, 2026.

 

1 Source: Barclays; data as of July 24, 2026.
2 Source: Bloomberg; data as of July 31, 2026.
3 Source: Bloomberg; data as of July 31, 2026.
4 Source: Deutsche Bank; data as of July 31, 2026.
5 Source: Deutsche Bank; data as of July 31, 2026.
6 Source: Trepp; data as of July 31, 2026.
7 Source: Deutsche Bank; data as of July 31, 2026.

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All investments involve the risk of loss of principal.

Investments in bonds are subject to interest-rate risk and can lose principal value when interest rates rise, while they typically increase their principal values when interest rates decline. Bonds are also subject to credit risk, in which the bond issuer may fail to pay interest and principal in a timely manner, or that negative perception of the issuer’s ability to make such payments may cause the price of that bond to decline.

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Spread typically is used to express the difference between two interest rates.

Mortgage-backed securities (MBS) are debt securities whose payments of principal and interest are backed by the cash flow generated by pools of mortgage loans.

Residential mortgage-backed securities (RMBS) are debt securities whose payments of principal and interest are backed by the cash flow generated by pools of residential mortgage loans.

Asset-backed securities (ABS) are debt securities whose payments of principal and interest are backed by the cash flow generated by pools of income-producing credit assets.

Commercial mortgage-backed securities (CMBS) are debt securities secured by cash flows from commercial real-estate mortgages.

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