Capital Markets | Auto Finance News - Part 3

Credit enhancement to mitigate ABS losses during recession

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 […]

LIBOR replacement on track for 2021

MIAMI — LIBOR’s replacement is top of mind at this year’s ABS East conference, and the general sentiment among issuers, investors and trustees is that a new overnight funds rate will be solidified by the targeted 2021 release. “[The industry] is getting to a point where people are narrowing down [the details] and [LIBOR’s replacement] […]

Credit margins shrinking in auto amid Fed rate cut, economist says

Despite the Federal Open Market Committee’s (FOMC) goal of boosting the economy and reducing the cost of borrowing money for lenders and banking institutions, the auto finance market may not see the intended benefits of Wednesday’s cut to the Federal Reserve’s benchmark interest rate, Jonathan Smoke, chief economist at Cox Automotive, told Auto Finance News. […]

EXCLUSIVE: Ford Credit sells Canvas portfolio to Fair 

Used-car leasing app Fair has finalized a deal to acquire the assets of Ford Motor Credit’s subscription service Canvas, the company announced today. The Canvas acquisition increases Fair's fleet by 1,000 for active consumer subscribers and 600 that can be used for rideshare or consumer demand — adding to the 45,000 active users Fair currently […]
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