Global ABS 2026: Five Themes Shaping The Structured Finance Market

Members of our structured finance team, including Priya Taneja, Stuart Axford, Martin Sharkey, Giacomo Bertolissi and Amber Chak, attended Global ABS 2026 in Barcelona.

While conversations at the conference spanned multiple asset classes and jurisdictions, five themes consistently emerged.

• Private credit continues to reshape funding markets, with back-leverage structures becoming increasingly central.
• Regulatory reform remains a factor for securitisation market activity.
• The Significant Risk Transfer (SRT) market is entering a new phase of maturity.
• Double-pledging is now a risk that investors are very much alive to, with technology aided transparency being regarded by some as the answer
• Data centres are moving from infrastructure story to structured finance asset class.

Key themes

Private credit continues to drive market evolution, with back-leverage structures becoming increasingly central

Private credit remained one of the talked about topics throughout the conference, with discussion moving increasingly towards the “second layer” of financing: back-leverage structures used to support private capital strategies, including portfolio-level, net asset value (NAV), asset-backed, and hybrid facilities, alongside more traditional subscription lines.

As private capital continues to expand beyond traditional direct lending, market participants highlighted rapid growth in asset-backed leverage in Europe, including senior/junior multi-tranche structures, loan-on-loan and repo-style financing, rated fund-finance products, and hybrid facilities that can shift from capital-call collateral to asset-level collateral as portfolios ramp.

For some participants, the key question is no longer whether private credit will continue to grow, but how these facilities can be structured with sufficient discipline. Limited partners (LPs) are increasingly sophisticated with regard to leverage; lenders are focused on diversification, eligibility criteria, valuation, cash trapping, and regulatory classification; and general partners (GPs) are seeking broader lender relationships and syndication options to create stable sources of capital.

Regulatory reform remains central to market development

Regulation continues to be one of the most significant factors influencing structured finance activity across Europe.

Discussions focused on the future of the European securitisation framework, capital treatment, and broader efforts to enhance the competitiveness of European capital markets. While participants welcomed ongoing regulatory engagement, there was broad recognition that regulatory developments will be a factor in issuance activity, investor appetite, and transaction structuring across multiple asset classes. A particular positive was the prospect of better regulatory capital treatment for securitisation investments.

As markets evolve, regulatory certainty and efficiency remain critical to supporting long-term growth.

The SRT market is entering a new phase of maturity

SRT transactions continue to play an increasingly important role in helping financial institutions optimise capital and manage balance sheet requirements.

What was particularly notable at Global ABS 2026 was the shift in focus from market adoption to market maturity. Discussions centred on execution, pricing, investor participation, capital efficiency, and the long-term sustainability of the asset class.

As the SRT market continues to expand, participants highlighted the importance of balancing innovation with consistency, transparency, and regulatory alignment.

Double-pledging risk is a key investor concern

TThe collapse of the UK bridging lender, Market Financial Solutions (MFS), has put collateral verification firmly back on the agenda, with market participants expected to demand more robust audit rights, the use of big four auditors across transactions, enhanced asset-level reporting, and independent verification of loan tapes and security packages. For trustees and agents, the key will be supporting stronger controls without inadvertently assuming open-ended monitoring or fraud-detection obligations.

Participants discussed the potential for independent registries, digital platforms, and distributed-ledger or tokenisation-style infrastructure to create a more reliable audit trail over pledged assets, giving financing providers greater real-time visibility into what collateral has been pledged, to whom, and when.

The discussions also highlighted that technology is not a complete solution on its own. Data integrity, governance, legal controls, and industry-wide adoption remain essential, particularly where implementation costs, fragmented participation, and evolving regulatory expectations could affect how quickly common standards emerge.

Data centres are moving from infrastructure story to structured finance asset class

The data centre discussion went beyond the obvious AI demand narrative. The more interesting point is that the scale of capital required for digital infrastructure is pushing sponsors, lenders, and investors to look harder at securitisation and other structured funding tools.

While the asset class has attractive features, long-term contracted revenues, mission-critical infrastructure, and strong hyperscaler demand, the risks are equally specific, with key questions relating to power availability, sustainability pressure, tenant concentration, technology obsolescence, and whether assets are genuinely stabilised.

The market opportunity is clear, but execution depends on disciplined structuring, credible cash-flow analysis, and careful allocation of operating, energy, and refinancing risk.

What this means for market participants

The discussions at Global ABS 2026 highlighted several trends with practical implications for issuers, investors, and financial institutions:

• Private credit is becoming an increasingly important source of capital across structured finance and specialty finance markets, with back-leverage structures increasingly central to how private capital managers scale, diversify, and optimise their funding.
• Regulatory developments will continue to influence transaction structuring, capital efficiency, and investor demand.
• The SRT market is becoming more sophisticated, creating opportunities for both financial institutions and investors.
• Credit quality, transparency, and structural protections remain central to investment decision-making.
• Innovation is creating new opportunities across asset classes, but risk management remains critical to execution.
• Financing providers will increasingly seek real-time transparency, robust data integrity, and governance around pledged assets, in order to mitigate multi-pledging risk. For market participants, the ability to connect legal, regulatory, financing, and commercial considerations is likely to become increasingly important as markets continue to evolve.

For market participants, the ability to connect legal, regulatory, financing, and commercial considerations is likely to become increasingly important as markets continue to evolve.

Looking ahead

The overall mood at Global ABS 2026 was constructive, and the buzz phrase seems to be “cautious optimism”. While economic and regulatory challenges remain, the market continues to demonstrate resilience, innovation, and a willingness to adapt to changing conditions.

The themes discussed throughout the conference are likely to remain at the forefront of the structured finance market throughout the year and will continue to influence how market participants raise capital, manage risk, and pursue growth opportunities, including through the continued growth of private credit and back-leverage structures.

Continue the conversation

If you would like to discuss any of the themes highlighted above, or explore how these developments may affect your business, please reach out to your usual McDermott Will & Schulte contact, or a member of our structured finance team, including Priya Taneja, Stuart Axford, Martin Sharkey, Vlad Maly, Giacomo Bertolissi and Amber Chak.

We would be delighted to continue the conversation.