International SF Weekly: Secondary activity is back to post-GFC-unwind peak levels

Research evidence excerpt

Accessible version

International SF Weekly

Secondary activity is back to post-GFCunwind peak levels

While the primary market may be nearing a holiday break, secondary activity continues

at a robust pace. New issuance was limited to 1 CMBS, 1CLO and 1 Australian RMBS

last week, leaving a sparse pipeline. BWIC volume surged by 20% WoW, notching a

second consecutive month of EUR2bn of monthly supply. Spreads were unchanged WoW

in most low beta sectors with minor steepening in the sub-IG credit curve in some cases.

See International SF Weekly Data Addendum: Secondary highs, dated 3 August

2026.

Commentary: Secondary supply is increasing in Europe

Secondary trading appears to be increasing in Europe. Augmented data set allows for a

longer analysis of secondary ABS/MBS activity. In June and July, bid list volumes reached

€2.0bn per month, which matches the levels in 2013-14, during the post-GFC unwind.

But BWIC volume represents a half to two-thirds of secondary activity. And now

secondary supply comes from new sources compared to the post-GFC unwind, we find.

RMBS: UK NC legacy loan performance holding up

UK NC legacy loan performance remains resilient, with slightly lower early arrears and

steady excess spread and CPRs. However, borrowers remain under pressure to maintain

mortgage payments, as interest rates remain high, with severe arrears and

repossessions still on the rise.

CLO: Risks stemming from high fixed-rate bond buckets

We discuss CLO collateral composition, including top holdings, industry exposure, and

price distribution, as well as the inherent risks from high fixed-rate bond buckets on the

CLO asset side. Higher fixed-rate bond buckets can lead to more MVOC ratio volatility as

well as squeeze IC test cushions and CLO equity CoC distributions when interest rates

increase. Please see European CLO Weekly: Caution with high fixed-rate bond

buckets, from 3 August 2026 for more details.

This document is intended for BofA Securities institutional investors only. It may not be

distributed to financial advisors, retail clients or retail prospects.

BofA Securities does and seeks to do business with issuers covered in its research

reports.…