Securitization in Focus — July 2025
Asset-backed securities
Consumer credit pulse
The latest sponsor earnings echo a healthy US consumer, even as the restart of
federal student-loan payments may create pockets of stress.
Originations: –1% quarter over quarter (QoQ) | +10.5% year over year (YoY)
Delinquencies: flat QoQ | +10 basis points (bps) YoY
Net charge-offs: –10 bps QoQ | +10 bps YoY
Credit backdrop: performance aligned with a steady labor market
OneMain Holdings
Consumer & Auto
Borrower resilience: non-prime segment buoyed by strong job market and wage gains
30-day delinquencies: -28 bps YoY | +1 bp QoQ
Synchrony Financial
Credit Card
30-day delinquencies: -34 bps QoQ | -29 bps YoY; now 10 bps below the 2017-2019 Q2 average
Average payment rate: 16.3%, up 100 bps versus the pre-pandemic norm
Debt-service burden: stable, near pre-pandemic levels
Portfolio trends: card and auto books show lower delinquencies and higher payment rates
Auto 30-day delinquencies: 83 bps YoY | -90 bps QoQ
Bread Financial
Credit Card
30-day delinquencies: -30 bps YoY | -20 bps QoQ
Net-loss outlook: reduced to 7.8%–7.9% amid tighter underwriting and stable macro backdrop
Average payment rate: 15.0%, up from 14.6% in 2Q24
SoFi
Consumer & Private Student
Personal loans: originations and balances up, with credit metrics improving
Outlook: management anticipates growth of in-school lending and student-loan refinancing after federal PLUS program changes
July delivered the busiest month of ABS supply this year, yet cumulative 2025 issuance still lags the same point in 2024 — $201.2B vs $212.9B.
ABS Issuance ($B)
Used-car pricing
The Manheim Used Vehicle Value Index slipped 0.8% MoM but rose 2.6% YoY to 206.9 in July 2025 — still 35.1% above July 2019.
Manheim Used Vehicle Value Index (%)
Source: Manheim Used Vehicle Value Index.
Banks tighten the screws on credit-card lending
The Fed’s Q2 Senior Loan Officer Opinion Survey shows a clear tilt toward tighter credit-card underwriting, while standards for auto and other consumer loans held steady.
- Credit-card standards: A moderate net share of banks raised minimum FICO thresholds, cut credit limits and further restricted approvals for sub-prime applicants.
- Auto & other consumer loans: Underwriting terms were largely unchanged.
- Borrower demand: Banks reported softer demand for credit-card and general consumer loans, but a modest pickup in auto-loan inquiries.
Bottom line: Consumers can still access auto and personal loans on familiar terms, but new plastic is getting harder to come by.
Commercial mortgage-backed securities
Commercial Real Estate (CRE) pulse: insights from Blackstone & KeyCorp
Blackstone | Gradual Commercial Real Estate (CRE) recovery
Blackstone’s earnings call framed a cautious uptick in CRE activity: deal flow is improving — especially for smaller assets — but management sees a drawn-out, not V-shaped, rebound. Blackstone Real Estate Income Trust (BREIT) recorded its strongest fundraising quarter in 2½ years. Executives stressed that the recovery’s speed hinges on interest-rate policy — swift cuts would hasten momentum, while a slower easing cycle would leave supply contraction to do more of the heavy lifting.
KeyCorp | Targeted growth, pockets of stress
KeyCorp reported that its CRE lending is concentrated in affordable housing, multifamily projects and data-center developments — areas still generating healthy demand. Management noted, however, that stress is surfacing in select segments, most visibly in office properties and certain multifamily assets, signaling a bifurcated market that rewards careful sector selection.
CMBS Issuance ($B)
Year-to-date (YTD) private-label Commercial Mortgage-Backed Securities (CMBS) supply is running at a post-Global Financial Crisis record — already more than twice 2023’s tally for the same period and 32% ahead of 2024’s pace. Even with a July breather, 2025 Commercial Real Estate Collateralized Loan Obligation (CRE CLO) volume remains nearly double last year’s run rate.
Delinquency trends
- Overall Commercial Mortgage-Backed Securities (CMBS) delinquency: 7.23%, up 10 bps month over month (MoM) and 180 bps YoY.
- Multifamily 30+ days past due: 6.15% (+24 bps MoM). Industrial: 0.52% (+1 bp MoM). Lodging, Office, Retail: down 12 bps, 4 bps and 16 bps, respectively.
- Trend check: 30+ day delinquency was 5.43% a year ago, peaked at 6.57% in December 2024, dipped to 6.30% in February 2025 and has risen steadily to today’s 7.23%.
- Seriously delinquent loans (60+ days, foreclosure, real-estate-owned or non-performing) remain unchanged at 6.93%.
Residential mortgage-backed securities
Issuance
Non-Qualified Mortgage (Non-QM) deals remain the clear issuance leader, approaching $40B YTD through July. The “Other” bucket — reverse mortgages, home-equity lines/loans and home-equity investment deals — takes the second-largest share, with Prime issuance close behind.
2025 Monthly Non-Agency RMBS Issuance ($B)
2025 YTD Non-Agency RMBS Issuance ($B)
Key
CAS/STACR: Connecticut Avenue Securities/Structured Agency Credit Risk
Non-QM: Non-qualified mortgages
NPL/RPL: Non-Performing Loans/Re-Performing Loans
SFR: Single Family Rental
Sources: Deutsche Bank, Trepp, Federal Reserve.
Manheim Used Vehicle Value Index tracks pricing trends in the used vehicle market but should not be considered indicative or predictive of any individual remarketer’s results.
As of 31 May 2025, the SJF Fixed Income portfolio held debt in GM Financial and Capital One.
The views expressed are those of SJF as of August 2025 and are subject to change without notice. These opinions are not intended to be a forecast of future events, a guarantee of future results or investment advice. Investing involves risk, including the possible loss of principal. Past performance is not a guarantee of future results.