Auto Loan ABS Holding Up Well Despite Rising Delinquencies
Rating performance for 2007 U.S. auto loan ABS has and will continue to hold up reasonably well in the face of rapidly rising delinquency and loss levels, according to Fitch Ratings.
Fitch projects cumulative net losses to reach and exceed levels not seen since 2001 due to the economic downturn and rise in unemployment. However, initial credit enhancement levels and the rapid de-leveraging of transaction structures among 2007 deals are serving as an effective shield against significant negative rating actions.
Through the first 16 months, losses on 2007 vintage prime ABS have reached 1.43%, significantly above the 1.00% realized through the same period on the 2001 securitization vintage. Fitch expects that losses on the 2007 vintage will continue to exceed those of the previous years observed and that CNLs will ultimately reach 3.0%−3.5%.
For details see Acceleration: Losses on 2007 Vintage Auto Loan ABS Pick Up Pace.
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