Barclays Forecasts Record High for Asset-Backed Securities in 2024
According to a recent note from Barclays Plc, the issuance of asset-backed securities (ABS) is expected to reach a record high in 2024, surpassing levels seen since the Great Financial Crisis. Sectors such as prime auto loans and digital infrastructure are projected to drive this growth. Barclays predicts total sales of new ABS to reach $280 billion next year, slightly exceeding the $277 billion forecast for this year. The rise in prime auto loan ABS issuance is attributed to banks seeking alternative financing sources amid declining deposits and funding pressures. Additionally, the ABS market for digital infrastructure, including bonds backed by fiber infrastructure and data centers, is expected to contribute to higher issuance. The strong demand for data transmission and longer duration ABS deals from insurance investors are factors supporting the robust issuance in data center ABS.
Implications of Record High Asset-Backed Securities for New Businesses
Barclays Plc's forecast of a record high issuance of asset-backed securities (ABS) in 2024 presents a potential game-changer for new businesses, especially those in the prime auto loans and digital infrastructure sectors. The predicted surge in ABS sales, which is expected to reach $280 billion, signifies a shift in the financial landscape that new businesses must navigate.
Opportunities in Prime Auto Loans
The anticipated rise in prime auto loan ABS issuance, driven by banks seeking alternative financing sources, presents an opportunity for new businesses in the auto industry. This trend could stimulate growth and innovation, as businesses adapt to the changing financial landscape and seek to capitalize on the increased availability of financing.
Impact on Digital Infrastructure
The ABS market for digital infrastructure, including bonds backed by fiber infrastructure and data centers, is also expected to see higher issuance. This could spur growth and innovation in the digital infrastructure sector, as businesses seek to meet the strong demand for data transmission and longer duration ABS deals.
In conclusion, Barclays' forecast of a record high in ABS issuance in 2024 could have significant implications for new businesses. The anticipated growth in the prime auto loans and digital infrastructure sectors could present opportunities for innovation and growth, as businesses adapt to the changing financial landscape.