American Honda Finance Corp.’s late-stage delinquencies rose 28% year over year to 1.21% of outstandings through June 2018, including a spike in delinquencies more than 120 days past due, according to the company’s latest securitization pre-sale report prepared by Fitch Ratings Agency.
Delinquencies more than 120 days past due grew to $108,000 up from just $40,000 the same period the year prior. Likewise, delinquencies 91-120 days past due totaled $12.3 million, up from $9.6 million in 2017. That’s the highest late-stage delinquency rate the captive has recorded since the fall-out of the Great Recession in 2009, when delinquencies in this category totaled $12.5 million and no loans were kept on the books past 120 days.
However, as a percentage of the captive’s total portfolio, delinquencies remain just above 1%. Delinquencies and repossessions totaled $344 million up from $300 million the same period the year prior. Loan balances grew to $28.4 billion through June, up 7.5% year over year.
The collateral issued in the securitization came in two pools: a $1.08 billion pool and a larger $1.35 billion pool, according to Fitch’s presale report. Honda Finance’s year-to-date issuances amount to $5.12 billion over three issuances up from $4.88 billion from four securitizations this time the year prior.
Though delinquencies are up, cumulative net losses are forecasted to reach 0.5% for the deal, which is on track with predictions from the previous securitizations.
Net losses for the captive’s overall portfolio are up slightly at 0.34% compared to 0.28% in 2017, but “far below historical crisis-era levels,” Fitch reports.
Fitch highlights key rating drivers of AHFC’s issuances are strong credit quality with weighted average FICO scores of 769 for both pools. Additionally, consistent credit enhancement structure, strong securitization performance, and historically low loss of portfolio and securitizations from 2010 to 2018.
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