Although the volume of auto ABS issuance is down from the same time a year prior, delinquencies and losses were up in July, according to Deutsche Bank Market Research’s July Auto ABS Monitor.
Approximately $68 billion of auto ABS has been priced year to date, down 9% from the same time a year prior, according to the report.
Issuance of deals backed by prime auto loans specifically is at $26 billion year to date – a 12% decrease from the same time a year prior, while subprime auto ABS totals $17.8 billion year to date — a decrease of 11.6% year over year.
“Issuance of ABS backed by retail lease and dealer floorplan receivables is down as well, with year-over-year declines of 20% and 19.7%, respectively,” Deutsche Bank wrote in the report. “Rental car ABS issuance is up 129% year-over-year, for a total of $2.8 billion.”
Delinquencies and annualized net losses increased on both a month-over month and year over year basis for prime and subprime auto ABS in July, according to Fitch’s auto ABS performance index data. For subprime, 60+ day delinquencies rose to 4.59% — up 59bp for the same time a year prior, while subprime annualized net losses rose to 7.39%. — 200bp YoY.
Prime 60+ day delinquencies experienced a smaller climb, but still up 4bp in July, — to 0.40% — over the same time a year prior, while annualized net losses were 6bp higher, rising to 0.48%.
“We expect to see delinquencies and annualized net losses for both prime and subprime auto ABS to rise through year end due to seasonal factors,” Deutsche wrote.
The July report summarized performance trends for active auto ABS issuers. On the prime end of the credit spectrum, the reports analyzed trust performance from eight companies, five on the nonprime side, and three for wholesale.
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