Worldwide volume of asset-backed securities sold in the second quarter fell by more than half compared with the year-earlier quarter, despite an increase in the total size of the global capital markets, the market data provider Xtrakter said Tuesday.
Issuance of asset-backed securities slowed to $100.6 billion in the second quarter, down 54.1% from the $219.5 billion issued in the year-earlier quarter, the London company said, despite a 10.3% increase in the size of international capital markets, to $14.1 billion.
"It is not unexpected that the appetite for asset-backed new issues has declined," said Kevin Milne, Xtrakter's chief executive officer.
Indeed, the damaging effects of the credit crunch caused many investors to walk away from the market, which is now considered highly risky.
However, the decline seems to be peculiar to the asset-backed market as Xtrakter recorded solid gains in the other areas of debt capital markets.