Income Research - Tue, 05/09/2023 - 20:23

Commercial ABS Debt Maturity Wall: “Die Another Day”

If you’ve ever seen a James Bond movie, you’re probably familiar with the basic plot line. James Bond (or “007” as he’s commonly called) gets caught up in some clandestine mission to save the world, performs impossible stunts like jumping out of a plane without a parachute, and inevitably prevails as a hero.

At this juncture in the bond market, many Commercial ABS issuers seem to have found themselves in the plot of a James Bond thriller. Commercial ABS bond yields have more than doubled over the last year as the Federal Reserve (Fed) battles inflation, creating refinancing risk for issuers with balloon-style repayment structures. Thanks to a very manageable near-term debt maturity schedule, however, many Commercial ABS issuers just might live to “Die Another Day.”

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