What will shape global structured finance performance in 2026?

Global structured finance in 2026: Stability, divergence, and structural change

Structured finance enters 2026 under shifting conditions. Lower interest rates and continued, albeit subdued, global growth are improving financing conditions across many sectors, but outcomes are becoming increasingly uneven across regions, asset classes, and origination channels. Stability at the aggregate level masks meaningful divergence beneath the surface.

Key takeaways for the Global Structured Finance 2026 Outlook:

• Lower interest rates are easing financing conditions across structured finance, but performance will increasingly diverge by region and asset class rather than move in lockstep.
• Private credit growth is reshaping asset origination and competition, weighing on new CLO collateral quality and altering issuance patterns for traditional ABS.
• Structural design matters more than ever, with digital infrastructure and well-protected utility transactions better positioned to absorb political, economic, and climate-related volatility.

Lower rates should support performance across many consumer transactions, particularly in jurisdictions where labor markets remain resilient. In Europe, employment conditions are expected to be more supportive than in the US, where affordability pressures, elevated borrowing costs, and potential labor market softening continue to weigh on consumer ABS and residential mortgage-backed securities. Across Asia-Pacific, macroeconomic conditions vary widely. Asset performance is expected to improve in Australia, remain broadly stable in Japan, and deteriorate moderately in China’s outstanding auto ABS.

Digital infrastructure continues to stand out as a relative area of strength. Rapid technological advances, the integration of AI into wireless devices, and growing demand for high-capacity fiber connectivity are expected to support wireless tower and fiber network ABS performance. Data centers have become a core property type within US single asset single borrower CMBS, and financing demand is likely to increase further as AI and cloud computing adoption accelerates. These assets benefit from strong secular demand and long-term contractual cash flows, although execution and concentration risks remain key considerations.

Political and geopolitical uncertainty will continue to shape regional performance. In the US, shifting government policies are likely to contribute to rising consumer credit risks amid affordability challenges and labor market uncertainty. In Europe, economic uncertainty remains elevated due to geopolitical tensions and ongoing trade disputes, complicating the outlook for growth and investment. These factors reinforce divergence across structured finance markets rather than broad-based cyclical stress.

Climate-related risks also remain an important consideration. Extreme weather events may increase outage frequency and revenue volatility in certain infrastructure sectors. However, structural protections embedded in utility cost recovery charge ABS transactions are expected to support strong credit quality for new deals and maintain solid performance for existing transactions, highlighting the continued importance of transaction design in mitigating external shocks.

Overall, 2026 is shaping up as a year defined less by directional shifts and more by structural differentiation. Lower rates provide support, but performance will increasingly depend on regional fundamentals, asset selection, and transaction structure. For investors and issuers alike, understanding where stability ends and divergence begins will be central to navigating the year ahead.

Read the full Global Structured Finance 2026 Outlook for deeper analysis and more insights into the drivers affecting structured finance in the year ahead.