“The addition of Texas Capital Bank to the roster in March this year shows there is potential for this mechanism to grow,” Simon Boughey, an analyst at Structured Credit Investor, told the WSJ.
Analysts told WSJ that the potential for higher yields, the positive growth outlook of the housing market, and a continued improvement in the borrowers’ credit quality are making the credit-risk transfers attractive to investors.
“People want exposure to housing and consumer markets that are performing,” Kaustub Samant, a securities analyst at JPMorgan, told WSJ. “Risk transfer securities are one of the few places that give high returns in this environment.”