Among our takeaways from the conference: consumer sector concerns seem to have eased.
As industry experts convened at SFVegas 2026, the world’s largest structured-finance conference, insurers showed up in large numbers, underscoring growing exposure to securitized assets and private credit in portfolios. We also attended the event and returned with a few key takeaways.
The sentiment toward the US economy and consumer was less cautious than we observed at the ABS East Conference in Miami in late 2025. While there are certainly still concerns about an economic slowdown, we didn’t notice any pronounced worries about recession risks over the next 12 months.
Consumer Concerns Have Ebbed, but Headline Risk Lurks
Worries about softening in the consumer sector have eased somewhat, likely because the rise in delinquencies has been gradual and measured. The balance sheet remains healthy, and the K-shaped US economy supports spending growth—with the highest earners providing a disproportionate share. AI will likely disrupt labor markets, and a few investors are wary that the higher-income jobs of prime consumers seem most vulnerable. Most, however, feel that this trend won’t play out for several years.
Headlines seem like the bigger risk, which has investors looking to move up in the capital structure given their views on collateral quality. Attendees seem quite positive on commercial asset-backed securities (ABS) including container and aircraft, given their view of steady economic growth. Public ABS spreads will likely stay compressed, particularly with the lack of supply from credit cards resulting from the shadow of a proposed 10% interest-rate cap. This has been offset a bit by greater capital needs among unsecured consumers, as “buy now, pay later” lenders become a larger share of the market.
AI Disruption Influences CLO and CMBS Views
The “AI as a disruptor” theme filtered into chatter on collateralized loan obligations (CLOs), centered on potential risks to credit fundamentals among software-as-a-service providers. We also heard many questions about large withdrawals from private-credit business development companies and the implications for the broader market. The pessimism has finally weighed on subordinate tranches, with BBB and BB spreads widening—though not enough, in our view, considering increased downgrade risks. Investors expressed their desire to stay up in credit quality, favoring AAA and AA tranches.
Views were somewhat negative on commercial mortgage-backed securities (CMBS)—or, more precisely, not-so-CMBS-like securities with underlying AI data centers and single-family rentals (SFR). Neither is 100% commercial real estate or CMBS in the traditional sense, and few CMBS investors use them over other CREFC segments. The tone is understandably more negative, given concerns about possible overbuilding of AI data centers and policy uncertainty surrounding SFR sectors. There’s less conviction on the path of interest rates: some worry that the US deficit and geopolitical tensions could boost long-term yields, pushing up cap rates and increasing the risk of extensions.
A Bright Spot: The Mortgage Seems to Be Back
Mortgage-backed securities seemed to be front and center in all conversations. We’ve seen the most participation in agency residential mortgage-backed securities (RMBS) in recent years. This is despite investors complaining about spreads being tighter since the announcement that Fannie Mae and Freddie Mac were to buy $200 billion in securities.
However, given the broader macro backdrop, many investors see RMBS as a relatively steady place to be positioned—and one that provides stable carry. For non-agency RMBS, performance has been strong and issuance has grown steadily. Non-qualifying mortgages were the primary focus, as investors’ interest remains strong and new issue supply could disappoint in 2026.
A Few References to the NAIC’s Direction of Travel
We heard mentions that the National Association of Insurance Commissioners’ (NAIC) CLO project could wrap up soon. The latest thinking suggests that the NAIC could move past the original securities-modeling framework, focusing on setting new risk-based capital charges. It said that it hasn’t yet assessed its path on ABS, and that CMBS and RMBS modeling could move toward the CLO method.
Beyond those indications, it seems clear to us that the NAIC is hyper-focused on gaining more transparency on private assets that are held on insurance companies’ balance sheets. We expect to see more stringent requirements for disclosure on statutory filings to include investment characteristics and analytics that the NAIC could use to identify assets warranting further scrutiny.
Whether it’s changing attitudes toward segments of the securitized market, insights into investors’ positioning or hints at the evolving regulatory landscape, conferences like SFVegas 2026 provide important readings on the pulse of the market.
