Record issuance can look like a vote of confidence, but in securitized credit it is better viewed as an expanding opportunity set.

In 2026, issuance has accelerated across asset-backed securities (ABS), commercial mortgage-backed securities (CMBS) and residential mortgage-backed securities (RMBS). ABS issuance reached $200 billion by early July, ahead of the record-setting 2024 pace. Private-label CMBS issuance surpassed $100 billion by the end of July, while non-agency RMBS issuance totaled $131.6 billion year to date.¹

But what lies beneath the strong issuance? And what does it tell us about credit performance?

CMBS delinquencies rose to 7.86% in July from 7.23% a year earlier. Office properties remained a notable pressure point, with delinquencies reaching 11.91%, while multifamily delinquencies rose to 7.69%. Industrials were the lone bright spot, with delinquencies declining to 1.13%.²

Consumer-related credit trends appeared more constructive. Major card issuers reported healthy spending growth, while some lenders improved their credit-loss outlooks. Data-center securitization also remained active, with $17 billion of issuance year to date.³

Non-agency RMBS issuance reached $131.6 billion year to date, with non-qualified mortgage securities accounting for nearly half of July volume. Second-lien and home equity line of credit issuance also reached $24 billion year to date—the strongest pace since the financial crisis.⁴

For investors, increased issuance may create more opportunity, but disciplined underwriting, structural analysis and careful security selection remain crucial.

Treasurys and rates. Higher yields across the curve weighed on Treasury performance in July as markets digested limited guidance from the Federal Reserve. Following the July Federal Open Market Committee (FOMC) meeting, markets priced a 64.9% probability of a September rate hike and roughly 33 basis points of increases by year-end. The 30-year Treasury yield rose 32 basis points to 5.27%, its highest month-end level since June 2007. Rising long-term yields also pushed 30-year mortgage rates to 6.66%, while year-to-date Treasury returns slipped to -0.84%.¹

Corporate credit. Investment grade corporates declined 1.67% in July, snapping three consecutive months of positive returns and marking the sector’s weakest month since March. Higher Treasury yields, particularly at the long end, were the primary drag on performance, while spreads widened 4 basis points to 78.2 basis points. High yield spreads also moved wider, though shorter duration helped limit rate sensitivity. Investment grade issuance reached a record $141 billion for July, while high yield issuance slowed to $18 billion, a 15-month low.^1,2

Securitized. Securitized markets declined as higher long-term yields pressured interest-rate-sensitive agency residential mortgage-backed securities, which fell 1.42%, while the Bloomberg US Securitized Index declined 1.34%. Shorter-duration asset-backed securities (ABS) and non-agency commercial mortgage-backed securities (CMBS) helped offset weakness, while collateralized mortgage obligations outperformed agency pass-throughs. Credit trends were mixed, with rising delinquencies in non-agency CMBS and auto ABS but improving credit card ABS performance. Issuance remained strong, with non-agency CMBS surpassing $100 billion and year-to-date ABS issuance approaching $230 billion.^1,3