Amid rising delinquencies and tightening credit requirements, Consumer Portfolio Services this week issued its first subprime auto-backed securitization of 2017 and thinks the market is “off to a great start,” said President and Chief Executive Charles Bradley Jr.
“If the market continues [like this], it will be a good year for the securitization market,” he told AFN. The issuance is backed by $206 million in subprime auto loan receivables and is the second auto securitization of the year, following Hyundai Capital America’s $810 million prime lease pool, according to S&P Global.
The CPS issuance includes loans with terms of 72 months or less, and the percentage of 60-month loans decreased to 74%, from 76% in the prior transaction, according S&P. “We’re more comfortable with the 72-month area, we’re really not in the market to go much past that,” Bradley said.
Tightening loan terms is part of the company’s strategy in the face of an anticipated slowdown in auto sales, he added. “2017 will be a more difficult year than the previous,” Bradley said. “The economy — although it appears strong — may not be as strong as everybody thinks. We’re probably a little more cautious.”