August ABS issuance falls to $27.2B; office CMBS delinquencies hit 12%

Asset-backed securities issuance fell to $27.2 billion in August from a $33.8 billion monthly average over the prior four months, according to a First Eagle Investment Management securitized market update published by Insurance AUM Journal on Oct. 26.

Year-to-date ABS issuance reached $256.5 billion through August, which the update says keeps 2026 on pace to surpass 2024 and 2025. Auto ABS accounted for 67.5% of August volume. Spread across eight months, the year-to-date total implies a $32.1 billion monthly run rate, so August came in roughly 15% below the 2026 average and about 20% under the prior four months' pace.

For an insurer's general account, the run-rate arithmetic is the practical part. A team that sized its 2026 ABS allocation off a $32.1 billion monthly pace had roughly a fifth less new paper to buy in August. Auto supplied 67.5% of what did come, so a buyer building a diversified consumer-ABS book had a narrower set of new pools to spread purchases across that month.

CMBS delinquencies edged down one basis point to 7.85% in August but remain 56 basis points above August 2025, according to Trepp data cited in the update. Office delinquencies climbed to 12.00%, more than four points above the all-property rate, while lodging and retail also moved higher. The five largest newly delinquent loans in August included office properties in Chicago, Los Angeles and Washington, D.C., plus a New Orleans hotel, Trepp data show. For a general account holding office CMBS, that gap suggests the office rate, not the headline 7.85%, is the figure that drives loss assumptions.

Consumer credit showed improvement on cards and continued stress in autos. Credit card ABS issuance reached $12.3 billion year to date, and charge-offs fell to 1.90% in August, below 2% for a second consecutive month, according to Bank of America data cited in the update. Auto delinquencies remain highest among lower-income borrowers, though deterioration has become more consistent across income groups.

Non-agency RMBS issuance totaled $19.6 billion in August and $152 billion year to date, and the update says the market remains on pace to surpass 2025 issuance. Higher rates could temper activity, the update adds, and non-qualified mortgages continued to represent a significant share of that supply.

Every figure in the update is as of Aug. 31. The update describes the August ABS slowdown as seasonal, which makes September issuance the data point that separates a calendar effect from a slower second half.