HELs Dominate ABS Issuance

Meanwhile, the issuance of asset-backed securities was 35.7% higher in the first quarter than a year ago, thanks mainly to growth in the home equity sector and a widening investor base, the bond group reported.Home equity loans accounted for nearly half of all ABS issuance in March and dominated issuance throughout the quarter, totaling $18.7 billion, a 52.7% increase from $12.2 billion a year earlier. "The increase stems from attractive interest rates that prompted homeowners to refinance or take out second mortgage loans, creating an increase in the supply of home equity loans available for securitization," the association said. "In addition, slower prepayment rates in the home equity ABS market attracted some investors from the mortgage-related debt market."