Securitization in the USA

This page updated regularly deals with securitization developments in USA. If you have any data, developments or contributions to make to this page, please write to me. Your contribution shall be acknowledged with credit to you.

The US securitization market

Important links: the American Securitization Forum

US Securitization agencies

Latest additions :

22 August 2002:

Volume of issuance for First half of 2002 reported here.

29th Nov: 2001:

Our news report here discusses market activity in the second half of 2001.

Added 1st Feb., 2000

Mortgage securitization data for 1999 was added to the News page. Click here to visit.

The United States of America is the largest securitisation market in the World. In terms of depth, it is the only market in the World where securitisation market draws participation from both institutional as well as individual investors. In terms of width, the US market has far more applications of securitisation than any other market.

Approximately 75%, or more, of the global volumes in securitisation are originated from the USA. This by itself indicates the tremendous significance of USA in global securitisation market. Not only this, even securitisation issues originating from other countries, including Japan, Europe and some of the emerging markets, draw investors from the USA.

In Mid-1998, the total volume of securitisation in USA was estimated at at $2.5 trillion with the bulk of it ($1.9 trillion) dominated by the inbreed, government-sponsored cousins known as Ginnie Mae, Fannie Mae, and Freddie Mac, which support housing finance and account for almost $9 out of every $10 in the MBS market. The other major components of the ABS market include commercial mortgages ($200 billion), credit-card and home-equity loans ($220 billion), and automobile loans ($75 billion). Recently, the subprime, home-equity segment of the ABS market has been the fastest growing and the riskiest.

Overview of the MBS market:

It is customary in the USA to classify securitisation markets into mortgage-backed and asset-backed (that is, other than mortgages) market.

MBS issuance in 1998 broke all-time record. The issurance in 1998 was $726.9 billion which was almost double of the issuance volume for 1997 [$368.0 billion ]. The previous record volume was $568.1 billion issued in 1993. The two factors responsible for this spurt are said to be generally positive economic climate, and low rates of interest prevailing round the year.

With this, the amount of outstanding mortgage-backed securities exceeded USD 2 trillion, up from the approximate USD 1.8 trillion the previous year.

The MBS market is still dominated by the US agencies:

Fannie Mae accounted for the bulk of outstanding supply, with outstanding MBS debt totaling $834.5 billion and accounting for 41.3% of the total at the end of last year..

Freddie Mac ranked second, with outstanding MBS debt accounting for $646.5 billion of the total supply at year-end 1998.

Ginnie Mae debt accounted for an estimated $538.0 billion in supply at the end of 1998. GNMA's volumes have been almost stagnant as compared to the previous year.

The most noteworthy feature is the sharp increase in trading in mortgage-backed securities. Average daily volumes over 1998 were recorded at USD 70.9 billion, which is about 50% up from the levels of the previous year.

Overview of the ABS market:

New issues of asset-backed securities totaled USD 197.6 billion, up by 7.1% over the previous year.

The chief feature of 1998 issuance was the buoyant activity in home equity loan issuance. Home equity loans took 41.9% of all issuance in 1998, representing $82.8 billion in issuance. Volume in the auto loan and manufactured housing sectors totaled $35.1 billion and $11.4 billion, respectively, while ABS collateralized by equipment leases totaled $9.2 billion.

The outstanding volume of ABS market in USA as at end 1998 is estimated at about USD 600 billion.

ABS market data:

The following data about ABS issuance in the USA has been taken from

Table 1 U.S. Annual Issuance of ABS by Collateral, 1985-1999, (Mil.$)

	Total	Auto	Credit cards	Manufactured housing	Equipment leasing	Student loans	Others
1985	1,135	797	-	-	-	-	338
1986	10,041	9,661	-	-	380	-	-
1987	9,855	6,522	2,410	184	-	-	739
1988	16,079	5,897	7,420	848	64	-	1,851
1989	21,785	7,823	11,326	1,970	-	-	666
1990	37,187	12,623	22,466	1,048	118	-	932
1991	40,299	15,046	20,833	1,316	385	-	2,720
1992	45,156	19,771	15,762	2,661	1,295	-	5,668
1993	54,994	25,268	19,597	2,459	3,668	597	3,406
1994	64,727	13,204	31,943	4,342	2,755	2,352	10,132
1995	90,302	23,471	46,975	5,739	2,657	3,345	8,116
1996	131,890	39,220	54,850	8,060	9,340	11,000	9,420
1997	150,100	45,680	47,610	9,310	7,760	16,970	22,770
1998	149,000	45,890	46,480	14,870	9,570	15,760	16,430
1999	185,787	73,147	50,427	21,667	11,253	12,267	17,027
Source: Dr. Joseph Hu (Standard and Poor's) article titled US ABS Credit Ratings show Solid Performance

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