Credit Performance | Auto Finance News - Part 3

Credit Unions Gain Share With Bigger Risk Appetites, Dealers Say

From the February issue: Credit unions have been grabbing marketshare by dipping into lower credit scores and making more exceptions, a sampling of dealers nationwide told Auto Finance News. As a result, larger banks and other financial lending institutions are missing out on potential borrowers, dealers said. Lower Valley Credit Union and Numerica Credit Union […]

Borrowers Granted Extensions Four Times More Likely to Repay Loans, KBRA Finds

Despite Honor Finance’s previous unorthodox loan extension practices, new research by Kroll Bond Rating Agency maintains that loan extensions remain a viable loss-mitigation tool for securitization servicers. "In moderation, extensions are a very useful tool — they maximize cash flow to the ABS trust," Brian Ford, senior director of structured finance research at KBRA, told Auto […]

Seasoned Loans Outperform Unseasoned Loans in Subprime Securitizations — Eventually

Fresh research from Kroll Bond Rating Agency shows that, contrary to popular belief, seasoning may not be the most accurate indicator of a subprime loan’s performance. Data from KBRA’s Subprime Auto Loan ABS report published Thursday illustrates that "very seasoned" subprime loans — those with 48 months of payment history — exhibited higher net losses […]

Franchise Dealer Originations Inch Higher in Westlake’s Latest Securitization

The ratio of franchise dealer originations in Westlake Financial Services's securitizations is on an upward trajectory, according to a recent DBRS presale report.  In Westlake's most recent securitization, an $800 million transaction slated to close Feb. 20, franchise dealer originations account for 38% of the pool. By comparison, franchise originations hovered at 30% in the […]

Exeter Finance Files for IPO, Expects to Raise $100M

Subprime lender Exeter Finance Corp. filed for an initial public offering to gain a larger marketshare in the “fragmented” auto finance industry, the company said in a Jan. 8 regulatory filing with the U.S. Securities and Exchange Commission. Blackstone-backed Exeter expects to raise $100 million in the IPO, the filing notes, though the timing of […]

GM Financial Issues $1.25B Securitization to Jumpstart 2019

GM Financial has kicked off 2019 auto asset-backed securitization activity with a $1.25 billion deal issued last week, according to presale reports. Although analysts anticipate macroeconomic headwinds, such as interest rate stresses, to hit the industry this year, Fitch Ratings Agency said in its presale report that losses in GM Financial’s 2016 and 2017 managed […]

Fitch Forecasts Subprime Auto ABS to Weaken in 2019

While prime auto lease and loan asset-backed securitizations are projected to remain stable, Fitch Ratings Agency expects the outlook for subprime auto ABS to weaken. In a 2019 consumer lending outlook, Fitch’s Senior Director of ABS Ian Rasmussen said subprime auto asset-backed securities are more vulnerable due to weaker borrower profiles and industry headwinds inflated […]
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