Securitisation 2026

Securitisation in 2026: A Year of Resilience and Innovation and the Next Phase of Market Evolution

As the securitisation market moves into 2026, the relative strengths and constructive developments of 2025 set the tone for the market shifts expected to happen in 2026. Across major jurisdictions, securitisation has continued to demonstrate its value as a flexible funding and risk-management tool amidst inflation, evolving monetary policy and heightened regulatory scrutiny. Throughout 2025, there has been a notable period of consolidation and recalibration rather than disruption and, while macroeconomic uncertainty has not fully dissipated, issuance patterns, asset performance and investor behaviour now reflect a more mature response to higher-for-longer interest rates and shifting credit conditions.

Throughout the year of 2025, securitisation markets in the United States, Europe and the United Kingdom remained active, supported by strong investor demand for structured credit, particularly at the senior end of capital structures. Nonetheless, the growth in non-traditional asset classes, the continued expansion of synthetic securitisation and the renewed regulatory engagement, all signal an evolving market. This introduction provides a snapshot of the securitisation trends shaping the industry, covering issuance volumes, delinquency concerns and regulatory updates across a range of jurisdictions.

Issuance Trends and Market Activity

The United States has maintained its status as the world’s largest market, continuing to lead global securitisation activity in 2025, underpinned by deep capital markets and a broad investor base.

European issuances across asset-backed securities (ABS) and mortgage-backed securities (MBS) remained sturdy, with renewables-linked and data centre securitisation continuing to expand and underscoring growing structural diversification across European markets. Despite higher interest rates in certain consumer segments, securitisation remained an appealing funding channel relative to unsecured alternatives. On the other hand, collateralised loan obligation (CLO) and commercial mortgage-backed securities (CMBS) issuance are expected to remain flat or lower following record activity in 2025. For 2026, platforms forecast issuance volumes in Europe to reach approximately EUR287 billion, representing a modest 4.4% increase from the record 2025 level.

In the UK, 2025 has been a year of gradual recovery for the securitisation market, following the volatility experienced in the previous year. UK residential mortgage-backed securities (RMBS) are also expected to continue to rebound as they have been benefitting from greater rate stability, resulting in increasing confidence amongst issuers and investors alike. As a result, UK RMBS are forecast to establish themselves as a core asset class for domestic and international investors seeking sterling exposure once again.

European securitisation issuance increased by 9% through the first ten months of 2025 and is expected to close the year at around EUR275 billion, matching the post-global financial crisis high reached in 2021. European activity over the year has been characterised by strength in CLOs and steady growth in both traditional and synthetic transactions. Namely, CLO issuance remained resilient despite ongoing concerns around leveraged loan performance, with investor demand concentrated in investment-grade tranches. At the same time, synthetic securitisation continued to play a role in bank balance sheet management, particularly in France, Germany and Southern Europe, as institutions sought to achieve capital relief while retaining customer relationships.

Despite this growth, European Union (EU) RMBS volumes softened slightly and regulatory engagement around significant risk transfer remained a defining feature of the European market.

Throughout the global challenges of 2025, such as geopolitical tensions and the long-term impact of past economic policies, the Luxembourg securitisation market managed to reflect steady growth. Specifically, there have been notably more securitisation transactions with the value of assets exceeding EUR100 million compared to the 2024 numbers. However, whilst the value of the transactions has increased, a lower number of deals has been recorded in 2025 compared to 2024. This casts doubts over the higher value transactions discussed above, posing questions on whether the higher values are attributable to growth or to inflation.

In terms of the top five most frequent listings of issued securities, private placements and listings on Luxembourg EuroMTF have preserved their top spots, while securities listed on the Irish Stock Exchange appear to have decreased compared to 2024. However, other EU-regulated markets have moved up in terms of numbers of listings, signalling an increase generally in EU markets’ listings.

India’s loan securitisation market has maintained an upward trajectory in 2025 as the Reserve Bank of India has allowed lenders to bundle bad loans into tradable securities. This has drawn foreign portfolio investors and private credit funds, helping deepen the country’s junk debt market and permitting market-determined securitisation of stressed assets. Consequently, the volume of securitised standard loans jumped by 25% to INR2.3 trillion (USD26.74 billion) throughout the year, also triggering a rise in the sector’s bad loans ratio.

Australia also sustained high levels of securitisation issuance in 2025, driven by continued demand for RMBS and by a growing appetite for non-mortgage ABS. Strong employment conditions and relatively low arrears supported investor confidence, while offshore participation in mezzanine and subordinated tranches highlighted the market’s increasing internationalisation.

Credit Performance, Interest Rates and Risk Considerations

Credit performance across securitised asset classes in 2025 reflected a bifurcated landscape. Prime and seasoned assets generally performed in line with expectations, while subprime and distressed assets remained elevated in certain consumer-facing sectors. In the USA, delinquencies in subprime auto and unsecured consumer ABS remained high, prompting greater investor differentiation between originators and collateral types. This trend reinforced a shift to quality, with stronger demand for senior tranches and transactions backed by borrowers with demonstrable income resilience.

In Europe and the UK, concerns around commercial real estate continued to influence sentiment throughout the year, particularly in office-backed CMBS, where structural shifts in working patterns weighed on valuations. However, other segments, such as logistics, data centres and residential-adjacent assets, proved more resilient. Overall, the stabilisation of interest rates during 2025 helped relieve some of the refinancing pressures, even though absolute borrowing costs remained higher than historical averages.

Inflation has largely settled within a more normal range, policy rates are expected to remain steady in the euro area and ease modestly in the UK, and growth remains modest but durable. Healthy labour markets and firm household income continue to support borrower performance.

In the UK, the Bank of England has been warning lenders against dodging capital rules through risk transfers, calling the increasing deals in which lenders offload credit risks from their balance sheets “imprudent”. As capital requirements have been heightened since the financial crisis, banks have increasingly used significant risk transfers (SRTs) to free up capital on their balance sheet, allowing them to continue lending and hike returns. To this end, the Bank of England issued a letter, warning lenders that they must “ensure that the regulatory capital approach they adopt appropriately reflects the substance of the transactions, including the liquidity of the underlying collateral”. Additionally, the letter classed repackaging of illiquid assets into a tradeable format without appropriate supporting evidence as insufficient to justify regulatory capitalisation under trading book rules. The Bank of England further claimed that it will use its statutory powers where necessary to make sure lenders are holding enough in their reserve.

Regulatory Developments and Market Structure

There were a number of important regulatory developments in 2025, as the European Commission continues to forward with a set of proposals aimed at revitalising the EU’s securitisation framework to make it simpler, more effective and supportive of economic growth. The EU securitisation market has developed a strong preference for synthetic securitisation, which reflects the specificities of the European financial sector, and which has been driving the European Commission’s rule-making process. Therefore, the proposed measures will facilitate securitisation activity in the EU while continuing to safeguard financial stability by allowing banks and other financial institutions to use the loans and debts they grant or hold (such as mortgages, corporate or SME loans), to pool them together and turn them into different types of securities that investors can purchase. By doing this, banks free up their resources, allowing further lending to businesses and citizens, while making it possible to move portions of credit risk to interested investors beyond the banking system. This stronger and simpler securitisation framework can help channel more investments into the real economy, thereby supporting economic growth, innovation and job creation across the EU whilst also aiming to boost the EU’s securitisation market, which is now highly concentrated, with 80% of EU securitisation activity being found in five member states (France, Germany, Italy, Spain and the Netherlands). This review is the first major initiative under the savings and investments union strategy, which focuses on improving the way the EU financial system works to improve investment and economic growth across Europe.

Distinctly, in the USA, the longstanding role of government-sponsored enterprises continued to underpin agency MBS markets, highlighting ongoing structural differences between jurisdictions that affect liquidity, pricing and investor participation.

In the UK on the other hand, regulatory focus throughout 2025 remained on transparency, disclosure and investor protection, with an increasing emphasis on alignment with international standards while preserving competitiveness post-Brexit.

Overall, across regions, ESG considerations remained part of the regulatory and market dialogue as in the previous years. Nonetheless, issuance of explicitly ESG-labelled securitisations grew more selectively in 2025, as investors became more discerning around standards, data quality and greenwashing risks.

Regarding market structure in 2025, the emerging private credit market surged to a record USD18 billion, despite cracks beginning to appear in the US sector after years of rapid growth. US private credit boomed in the wake of the global financial crisis on the back of demand for loans for private equity buyouts and exotic forms of asset-backed finance that banks were less able to provide. However, that has also led to concerns among some investors over the erosion of controls on borrowing and covenants. Private equity has been less prevalent in emerging markets, and private credit funds have focused more on replacing traditional bank loans to companies, while retaining tight covenants.

Emerging Themes and Innovation

A defining feature of 2025 has been the gradual diversification of securitised asset classes. Alongside traditional mortgages and consumer receivables, markets saw increased interest in securitisation backed by infrastructure assets, renewable energy projects, data centres and intellectual property-linked cash flows. While these structures remain more bespoke, they reflect a broader trend towards using securitisation to fund assets aligned with digitalisation and with the energy transition.

AI continued to be a remarkable theme this year, propelling global stocks to record highs which have in turn caused an increase in the debt finance of the data centres needed to power the technology. As such, AI data centre and project financing deals have surged from USD15 billion in 2024 to USD125 billion this year, with more supply from the sector expected to be pivotal for credit markets in 2026. With public and private credit having become a major source of funding for AI investments, the Bank of England has warned that the growing role of debt in the AI infrastructure boom could heighten potential financial stability risks.

The year 2025 has also seen the introduction of the once-niche “Bowie Bonds” into the mainstream as Wall Street is hunting for yield. This is due to investors such as Blackstone, Carlyle and Michigan’s state pension funds having raised at least USD4.4 billion of debt backed by songs this year compared to the over USD3.3 billion raised in 2024. As such, big investors have been packing songs into securities backed by the revenues of hits from stars such as Justin Bieber, Lady Gaga and The Beatles. Despite previously being seen as “too exotic for serious money”, the rise of the “Bowie Bonds” as an investable asset class marks the latest twist in a US economy where the search for yield has redrawn boundaries of finance.

Looking Ahead: Expectations for 2026

Expectations for 2026 are broadly positive as the securitisation market continues to recover after a period of adjustment. While macroeconomic risks remain, particularly around geopolitical developments, securitisation is widely viewed as well positioned to benefit from renewed credit growth and ongoing bank balance sheet optimisation. Moreover, issuance volumes in Europe and the UK are expected to grow modestly, with ABS and RMBS remaining core drivers, while CLOs and synthetic securitisations will likely retain their strategic importance. Investor demand is expected to remain strong, supported by the relative value offered by securitised products compared with corporate credit, as well as their diversification benefits.

Guide Introduction

As securitisation markets navigate the evolving economic and regulatory landscape, the 2026 Chambers Securitisation Guide equips practitioners with essential insights into today’s transactions, including structuring considerations, jurisdictional developments and the most recent regulatory developments.

The Guide offers a comprehensive overview of securitisation activity across major and emerging markets. Each jurisdiction chapter outlines the most commonly securitised assets, the transaction structures typically adopted and the preferred locations for establishing special purpose entities. The Guide is intended to be accessible and practical, enabling readers to follow the latest developments on issuance trends and market availability, credit performance, interest rates and risk considerations, regulatory developments and market structure, as well as emerging themes and innovation, with a focus on how 2025 differentiates itself from 2024 and on what to expect from 2026.

Prepared by leading securitisation experts, the Guide serves as a useful resource, offering a detailed analysis and practical support for securitisation transactions across different jurisdictions. We hope that practitioners will find this edition of the Guide informative, practical and relevant. As always, we welcome comments and suggestions for future editions, and we look forward to supporting our readers as the securitisation landscape continues to evolve.