Subprime auto lender Westlake Financial came to market May 6 amid an industrywide year-to-date increase in auto securitization activity.
Westlake issued a $1.5 billion asset-backed securitization (ABS) deal backed by subprime loans, according to CreditFlow, which monitors securities.
The newest Westlake deal may have stronger credit performance than Westlake’s January and October 2025 ABS deals. The collateral pool’s weighted average (WA) FICO score was 621 for the newest transaction, up from 619 in January’s deal and 620 in the October 2025 transaction, according to the deal’s S&P Global presale report, published May 4.
The WA payment-to-income ratio was 13.3% in the newest deal, down from 13.6% in the January deal and 13.5% in the October 2025 deal, according to S&P. The WA annual percentage rate was 18.3%, down from 19% in January’s deal and 19.2% in October 2025’s deal.
However, the WA loan-to-value ratio was 119.5%, up from 116.5% in the January deal and 117.9% in the October deal, according to the presale report.
The deal also featured shorter loan terms than Westlake’s two most recent transactions, according to S&P. The WA original term length was 59.51 months, compared with 60.52 months in its January deal and 61.2 months in October 2025’s deal.
The WA share of loans with original terms between 61 and 72 months was 43.8% in the newest deal, down from 49.4% in the January deal and 48.6% in the October 2025 deal.
Meanwhile, Westlake’s managed portfolio grew 13.3% year over year to $19.6 billion as of March 31, according to S&P Global. The portfolio’s total delinquencies fell 47 basis points (bps) YoY to 2.99%. Net losses rose 55 bps YoY to 6.94%.
Auto ABS volume rises
U.S. auto ABS volume totaled $68.3 billion YTD through May 8, up 5.7%, according to the latest data from JPMorgan Securities.
By asset type, according to JPMorgan Securities, issuance volume was:
- $30 billion in prime loans, down 2.6% YTD;
- $17.5 billion in nonprime loans, up 7.4% YTD;
- $16.3 billion for leasing, up 33.6% YTD; and
- $4.5 billion for fleet and others, down 16.7% YTD.
Other recent issuers
Seven additional auto ABS issuers came to market from May 5 through May 7, according to CreditFlow:
- American Honda Finance issued a $2.1 billion prime deal on May 5;
- Ford Credit issued two floorplan deals, totaling $1.6 billion on May 5;
- GM Financial issued a $1.2 billion leasing deal on May 5;
- World Omni Auto issued a $1.3 billion prime auto deal on May 5;
- Toyota Financial Services issued a $1.6 billion prime auto deal on May 5;
- Driveway Finance issued a $526 million prime auto deal on May 6; and
- Mercedes-Benz Financial Services issued a $801 million prime auto deal on May 7.
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