S&P: Investors are eying nontraditional asset securitizations
Investor interest in nontraditional U.S. asset securitizations is likely to be strong in 2011 thanks to attractive bond yields, Standard & Poor's Ratings Services said in a report published Tuesday. Since nontraditional asset securitizations — which includes everything from catastrophe bonds to transportation leasing and timeshare securitizations — maintained a solid performance throughout the economic downtown, S&P says market participants are confident investors will be eying the nontraditional securitizations more closely this year. "We based our views mainly on feedback we received from investors, arrangers and originators, many of whom participated in a series of roundtable discussions we sponsored in late 2010," S&P Ratings Services said in its latest report. Despite maintaining a solid performance, spreads on nontraditional asset classes tightened last year because of the issuance of low yields and the limited volume of more traditional structured finance asset classes, S&P reported. "We believe this combination will continue in 2011, providing a favorable environment for nontraditional asset issuers — some of whom will need to tap the securitization market to refinance either term or warehouse debt," S&P added. Nontraditional asset securitizations tied to transportation leasing could benefit from forecasts which suggest the business and transportation leasing sectors are expected to buoy the recovery that began in the second half of 2010, the report concluded. Write to Kerri Panchuk.