Space Coast Credit Union eyes second auto ABS deal as originations rise

Space Coast Credit Union is planning to issue a second auto asset-backed securitization deal after growing originations and as year-to-date credit union issuance outpaced last year’s levels through early May. The Melbourne, Fla.-based financier is looking to come to market with a second auto asset-backed securitization ( ABS) deal in the back half of the year, up from its pace of one transaction per year, Gabriel Engman , executive vice president and chief financial officer, told Auto Finance News . When it issued its first ABS deal in 2023, the credit union “needed the liquidity,” he said. SCCU issued a $400 million prime auto transaction on April 16, according to CreditFlow , which monitors securities. The credit union issued the deal earlier than July, when it has issued deals previously. “Participating in the ABS market gives us access to additional investor funds and other funding opportunities,” Engman said, adding that the credit union issued earlier to allow for a second deal later in 2026. “As we've progressed and matured within that space, this is part of our lending and funding strategy.” The issuance was originally planned for March before the Iran war created volatility in funding markets , Engman noted. The credit union moved forward during the cease fire, which “allowed the markets to handle some additional ABS volume without some of the widening of spreads that had happened .” Auto originations have ramped up in the past two months after slowing at the end of 2025 due to consumer stress, Engman said. SCCU’s auto originations total about $140 million per month as of April, down from about $200 million per month in 2025 but up from about $130 million at yearend 2025. The credit union joins other lenders seeing more longer-term loans due to affordability challenges , Engman said. The percentage of loans with origination terms longer than 72 months in the latest auto ABS deal was 77.5%, up from 72.6% in the 2025 issuance, according to an April 13 S&P Global presale report. “We are seeing 84-month term loans making their way into the ABS deals, and there is no real concern from us or the investor population; it’s a recognition of where the market is,” he said. In fact, SCCU’s most recent auto ABS deal attracted 31 investors — five new — up from 18 unique investors in the prior deal, Engman said. “We're mindful of operating in a consistent credit box so that the dealership network knows who we are and where we are in the market,” he said. SCCU’s managed auto portfolio stood at $2.9 billion as of Dec. 31, 2025, down 11.6% YoY, according to S&P Global. The rate of 30-plus-day delinquencies was 1.91%, up 20 basis points (bps) YoY, while annualized net charge-offs increased 8 bps YoY to 0.8%. CU auto loan market share trails banks Meanwhile, credit unions are coming “strong” to the market amid continued competition from banks, AmeriTrust Financial Technologies ’ Chief Executive Jeff Morgan told AFN . AmeriTrust provides automotive finance technology and facilitates transactions among dealers, funders and consumers. “Credit unions have a low cost of funds ... and are getting more market share because of this shift to longer-term financing,” he said, noting near prime and subprime consumers who need lower payments typically turn to longer-term loans. “You're seeing a lot of credit unions that are willing to take that risk to get more market share because they want to continue to climb, [and] you may not see it at the banking level as much.” “Credit unions have a low cost of funds ... and are getting more market share because of this shift to longer-term financing." -- Jeff Morgan, AmeriTrust Financial Technologies In March, credit union share for near prime auto loans rose to 15.1% compared with 14.92% in September 2025 and for subprime rose to 6.03% compared with 5.61% in September 2025, according to Experian data provided to AFN . Auto loan share (subprime & near prime) [caption id="attachment_58361308" align="aligncenter" width="936"] (Courtesy/Experian)[/caption] Total credit union share for auto loans was 22.08%, in line with recent months but lower than banks’ 29.7%, according to Experian. Auto loan share (new & used) [caption id="attachment_58361311" align="aligncenter" width="936"] (Courtesy/Experian)[/caption] Credit unions are also aggressive on rates. Navy Federal Credit Union , for example, recently lowered auto loan rates to as low as 3.89% APR for new cars and 4.79% APR for used vehicles. PenFed Credit Union is offering auto loan rates as low as 3.99% APR and saw auto originations rise 88% year over year through the first quarter to $595.1 million. Digital securitizations rise 10.5% Growth in auto lending fuels auto ABS issuance, AmeriTrust's Morgan said. Chesterfield, Mo.-based First Community Credit Union also issued a $316 million prime auto ABS deal on Feb. 18, according to CreditFlow. By comparison, no credit union auto ABS deals were issued YTD through May 7, 2025. By another measure, growing interest in digital adoption by credit unions contributed to a 10.5% rise in the number of transactions in digital securitization markets from the period between Q4 2025 and the first quarter, according to Wolters Kluwer data published April 16. The uptick came despite S&P Global’s forecast for a 4% drop in overall auto ABS issuance in 2026. Digital capabilities are making auto lending and securitization more efficient for credit unions, Matthew Babcock , digital lending product strategist at Wolters Kluwer, told AFN. “One area we're seeing a lot of growth ... than previous years is credit union securitization,” he said, noting that the company has spoken with several credit unions that plan to securitize in 2026. “It's great that more and smaller credit unions are getting access to tap into the secondary markets and access securitization and liquidity and in a new method.” Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with Auto Finance Summit East and Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live .

Space Coast Credit Union eyes second auto ABS deal as originations rise

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