Securitization Weekly Overview: 2H26 Supply Outlook: Better Technicals Ahead

Research evidence excerpt

Securitization Weekly Overview: 2H26 Supply Outlook: Better Technicals Ahead

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Securitization Weekly Overview

2H26 Supply Outlook: Better Technicals

Ahead

Supply moderation should improve technicals in 2H26 26 June 2026

First-half issuance has been heavy, with total securitized product (SP) gross supply up Securitized Products Strategy

22% YTD and net supply up 25%, driven by strength across MBS, ABS, and CMBS. United States

However, forecasts point to a clear deceleration into the second half, particularly as Chris Flanagan

seasonal factors weigh on issuance. This moderation, combined with already strong FI/MBS/CLO Strategist

demand, sets up a more supportive technical backdrop and increases the likelihood of BofAS+1 646 855 6119

stable-to-tighter spreads into 2H26. christopher.flanagan@bofa.com

Alvin Fung

Strong demand continues to absorb elevated issuance ABSBofASStrategist

Despite higher supply, spreads have remained resilient, supported by consistent inflows +1 646 855-9091

alvin.fung@bofa.com

and attractive carry. Year-to-date returns reinforce this dynamic: AAA CLOs (+2.4%),

Agency MBS (+1.5%), and ABS (+1.4%) have delivered steady performance, while even

higher beta segments like CMBS (~1.0–1.4%) have held in well. This ability to absorb

supply without meaningful spread widening underscores the strength of current demand

conditions. We believe equity-related wealth gains are providing the absorptive capacity

for heavy fixed income supply.

For a list of common acronyms, please

Returns driven by carry, with rising dispersion across refer to the appendix at the conclusion

of this document.

sectors

Across time horizons, securitized returns reflect carry stability rather than beta-driven Link to Chartbook

rallies.