Morgan Stanley Investment Management -Mon, 11/09/2026 - 20:23

The FABN Opportunity: A Look at Issuer Fundamentals and Market Appeal

Stephen T. Fitzsimmons
Head of Insurance Portfolio Management

Erica Reynolds
Insurance Portfolio Manager

Kevin To
Insurance Portfolio Manager

Funding Agreement Backed Note (FABN) issuance has accelerated sharply in recent years, prompting the NAIC to propose enhanced disclosure requirements. This insight takes a closer look at FABN issuance, comparing the financial profiles of FABN issuers with the broader life insurance industry to assess whether their use has resulted in meaningfully higher risk. We also flag where recent regulatory and rating agency changes may be creating new portfolio opportunities within the CLO space.

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Morgan Stanley Investment Management’s Insurance Solutions team proudly supports our insurance clients with bespoke investment solutions and a comprehensive range of strategies that align well with insurers’ investment objectives and risk tolerances. We provide risk-based capital efficient solutions across public and private market strategies, and add value through thought leadership across insurance research, portfolio management, strategic asset allocation, reporting, risk management, and rating agency/regulatory considerations.

Joel Cramer, CFA
Managing Director, Head of North American Insurance Solutions
joel.cramer@morganstanley.com
Office: 312 706 4216
Mobile: 630 222 6765

1585 Broadway,
New York, NY 10036

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