ABS Weekly: 2H Outlook, 1H Review

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ABS Weekly: 2H Outlook, 1H Review

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ABS Weekly

2H Outlook, 1H Review

Spreads trend mixed but still expect them to tighten 26 June 2026

For the week, spreads tightened up to 5bps for several sectors, including the retail auto Securitized Products Strategy

loan, retail auto lease, FFELP student loan, equipment, and floorplan ABS sectors. United States

However, spreads widened 3bps for rental car ABS and 5bps for franchise ABS and fiber

ABS. Spreads were unchanged for remaining sectors. Click links (see reports) for ABS Chris Flanagan

new issue volume and pricing by deal and ABS Spreads time series. FI/MBS/CLO Strategist BofAS

+1 646 855 6119

Spreads tighter, excess returns higher christopher.flanagan@bofa.com

Spreads across most ABS sectors are expected to tighten toward 24-month lows before Theresa O'Neill ABS Strategist

becoming rangebound, with the greatest tightening potential in sectors currently trading BofAS

furthest from those lows, many of which also offer higher yields. While several sectors +1theresa.oneill@bofa.com646 855 9285

are already near their tights and may have limited further tightening, higher-yielding Alvin Fung

areas like fiber and railcar still provide support for returns. In contrast, sectors such as ABS Strategist

BofAS

subordinated autos, personal loans, private student loans, data centers, rental cars, and +1 646 855-9091

solar ABS offer the most upside from both tightening and yield. Tighter spreads should alvin.fung@bofa.com

support stronger 2026 returns versus 2025, though still below the exceptional

performance of 2023–2024. Year-to-date (YTD) returns have modestly lagged CMBS and

See Exhibit 38 on page 26 forIG credit, while within ABS, higher-yielding “Other” sectors have outperformed Autos