Outlook for 2025: Navigating ABS Market Dynamics

The significant tightening in corporate bonds recently has left asset-backed securities looking cheaper, says Rod Chadehumbe, Bloomberg Intelligence’s asset-backed securities strategist. Chadehumbe is joined by host and BI chief US rates strategist Ira Jersey to discuss the state of the US ABS market. The pair dive into the engineering of the various types of products, as well as the general risk-reward profiles available to investors. They also hit on the liquidity and volatility dynamics of the asset class, expectations for ABS relative value in 2025 and forecasts for new issuance in the coming year.