Credit enhancement to mitigate ABS losses during recession | Auto Finance News | Auto Finance News

Credit enhancement to mitigate ABS losses during recession

© Can Stock Photo / Elwynn

MIAMI — Recently issued subprime auto bonds rated below triple-A are at risk for downgrades in a hypothetical recession, according to a study conducted by rating agency DBRS. However, the risk is mitigated by built-in credit enhancement in auto securitizations’ structures, DBRS analysts told Auto Finance News. DBRS’s study involved a simulation “similar in scope […]

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