Santander Consumer USA, General Motors Financial Co., and Exeter Finance Corp. account for 73% of subprime securitization issuances so far this year, according to Amy Martin, senior director structured finance ratings group at Standard & Poor’s.
SCUSA was also the top contributor to 2014’s $19.96 billion of subprime auto finance securitizations, accounting for 36% of all transactions that year.
In fact, last year subprime dollar issuance reached the highest level its been since 2006’s $21.6 billion total, Martin said during a presentation at last week’s 2015 Nonprime Auto Financing conference in Dallas. At the time, Capital One Auto Finance Inc. was the top subprime ABS contributor.
Competition in the auto finance space will remain “intense” this year, she said, and S&P expects continued growth in subprime auto loan ABS, led by increased issuance from existing issuers.
Martin also said that S&P is watching delinquencies closely, and that the percentage of 30 days or more past due in December 2014 was at an all time high at 9.46%, which “highly correlates with losses” in the securitization pool, she cautioned.
“When they start to tick up, losses are going to tick up, too,” she said. “They are not leveling off, they continue to rise, which does concern us.”