America’s Car-Mart issues first ABS deal since layoffs

America’s Car-Mart issued its first auto asset-backed securitization transaction following structural changes announced during the company's fiscal second-quarter earnings. On Dec. 11, America’s Car-Mart (ACM) came to market with a $161.3 million subprime auto asset-backed securitization (ABS) transaction, according to CreditFlow , which monitors securities. The deal comes almost six weeks after the end of the buy here, pay here used-car dealer’s fiscal Q2 on Oct. 31, when net losses totaled $22.5 million , according to its Dec. 4 earnings report. Additionally, the retailer implemented Phase 1 of its three-phase cost-cutting plan that included laying off 10% of its workforce in November, Chief Executive and President Douglas Campbell said during the company’s earnings call. ACM’s originations totaled $266 million, up 4% year over year in Q2, according to its earnings report. The Rogers, Ark.-based retailer’s managed portfolio totaled $1.5 billion as of April 30, up 5.2% YoY, according to a Dec. 8 S&P Global presale report. Total delinquencies dropped 42 basis points (bps) YoY to 3.21% and annualized net losses dropped 176 bps YoY to 28.72% for the six months ended Oct. 31. An ACM representative did not respond to a request for comment by publication time. ABS volume ticks up Industrywide, ABS volume climbed year to date despite mixed loan performance by credit tier due to increased affordability and inflation pressures. “Within the securitized world, we've seen both credit performance continue to weaken on the margins [and] delinquencies and loss rates continue to rise across auto ABS, both in prime and subprime,” Brian Ford , head of structured finance research at Kroll Bond Rating Agency , told Auto Finance News This trend is in part influenced by the cyclical nature of tax season, he noted. “Within the securitized world, we've seen both credit performance continue to weaken on the margins [and] delinquencies and loss rates continue to rise across auto ABS, both in prime and subprime.” -- Brian Ford, head of structured finance research, Kroll Bond Rating Agency Still, issuance of auto ABS deals climbed 2.2% YoY to $166.6 billion year to date through Dec. 12, according to JPMorgan Securities data . The breakdown, according to JPMorgan Securities, was as follows: Prime issuance totaled $77.8 billion, up 1% YoY; Nonprime issuance sat at $42.2 billion, up 4.5% YoY; Lease issuance totaled $31.8 billion, up 5.7% YoY; and Fleet issuance totaled $14.8 billion, down 4.5% YoY. Securitizations Volume [caption id="attachment_58357612" align="alignnone" width="1026"] Source: Big Wheels[/caption] December issuance mixed Meanwhile, several lenders came to market in December with a mix of asset types, according to CreditFlow , which monitors securities. On Dec. 4, Stellantis Financial Services came to market a $1.5 billion lease transaction; On Dec. 5, PruVista Capital came to market with a $120 million lease transaction; and On Dec. 10, Santander came to market with a $212.6 million prime transaction. Stellantis declined to comment on its ABS deal, and Pruvista and Santander did not respond to requests for comment before publication. Future issuance, performance Performance of securitized auto loans has stabilized this year and is expected to improve in 2026. However, forecasts vary based on loan type , with the worst performance expected among lower credit tiers. “Right now, [auto loan] performance is largely stable,” Warren Kornfeld , senior vice president of U.S. Financial Institutions Group at Moody’s , told AFN, noting that delinquencies and charge-offs have stabilized over the past year from record lows during the pandemic. However, in the second half of 2026, “we'll likely see some modest deterioration in auto loan asset quality,” he said, noting the weakening labor market as a driving force. KBRA, however, believes ABS performance is likely to improve as lenders tighten underwriting standards, Ford said. “We don't expect this trend of higher losses and delinquencies to continue to rise indefinitely,” he said. “Assuming the economy and jobs market stay strong in 2026, we would expect to start to see a leveling off in credit performance next year. ... Our expectation is it's going to be a strong year.” “Assuming the economy and jobs market stay strong in 2026, we would expect to start to see a leveling off in credit performance next year. ... Our expectation is it's going to be a strong year.” -- Brian Ford, head of structured finance research, Kroll Bond Rating Agency Additionally, “with tightening of underwriting across a number of issues that we rate, I would expect that to be conducive to continued strong credit performance in 2026 and a marginal increase in issuance volume as well,” Ford said. Issuance may also rise if lower interest rates drive demand for auto loans, leading to more securitization deals, he added. “With the expectation of interest rates possibly going lower at some point in 2026, that may lower monthly payments; this, in turn, could continue to spur on new auto loan demand, some portion of which will be packaged into securitization,” he said. “All of these factors should continue to cause an upward push in supply and a downward push in credit performance deterioration.”

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