SFVegas 2026: What Happened Doesn’t Have to Stay in Vegas

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.