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 […]

• Joey Pizzolato
• September 24, 2019
• Capital Markets, Exclusive

Securitization residual values hit 12-year low

The average residual value expected in auto lease securitizations this year dropped to a level unseen since 2007, according to a report published last week by Moody’s Investors Service. Residual value risk, as measured by securitizations’ residual value settings, was set at an average of 46.2% of MSRP, down from 47.1% in 2018. “The lower […]

• Bianca Chan
• August 26, 2019
• Capital Markets

Fair eyes new debt funding

Fair is in discussion with a "major global financial institution" for as much as $500 million of debt funding, Co-Founder Georg Bauer told Auto Finance News. To date, the 3-year-old vehicle subscription company has raised $1.5 billion in funding over nine rounds. "Once this [funding] is closed, we are picking up our work with the […]

• Bianca Chan
• August 12, 2019
• Capital Markets, Exclusive, Innovation & Technology

GM Financial, Hyundai ramp up lease ABS with $1.9B of issuance

General Motors Financial and Hyundai Capital America are driving auto lease ABS volume, bringing a combined $1.9 billion of receivables to market, according to presale reports from S&P Global Ratings.  GMF’s $1 billion deal marks the captive’s third lease securitization this year, boosting its total volume to $3.4 billion in 2019. The collateral pool consists […]

• Nicole Casperson
• August 5, 2019
• Capital Markets

China’s auto ABS market tops $4.5B on heels of Geely deal

China’s asset-backed securities market is a growing funding source for auto lenders, as issuance has topped $4.5 billion (RMB31.2 billion) this year, according to data from S&P Global Ratings’ China Securitization Performance Watch report.  “We expect improving debt serviceability, enhanced underwriting and risk control, and securitization’s structural protection to continue to support the robust performance […]

• Nicole Casperson
• July 18, 2019
• Capital Markets

Longer-term loans weigh down USAA securitization

Nearly two-thirds of the loans in USAA’s first asset-backed securitization of the year have terms longer than 60 months — a first for the company, according to a Moody’s Investors Service pre-sale report published Tuesday. In the $503 million transaction, 64% of loans have an original term greater than 60 months, which is the highest proportion of […]

• Bianca Chan
• July 18, 2019
• Capital Markets, Risk Management

Auto ABS heats up with $4.7B of issuance

A handful of prime and subprime securitizers pumped up ABS volume this week, bringing $4.7 billion of loans and leases to market, according to presale reports from S&P Global Ratings.  Auto ABS volume totaled $61.3 billion as of July 8, up 12.7% year over year, according to data from JPMorgan Securities. On the prime side, […]

• Nicole Casperson
• July 11, 2019
• Capital Markets

Japanese auto lender heats up ABS market with $468m issuance

Japanese auto financier Orient Corp. (Orico) is bringing $467.6 million of asset-backed securities to market in a deal that’s expected to close July 30. The notes were rated by Moody’s Investors Service and Fitch Ratings.  The deal is Orico’s second this year, propping up the lender’s U.S. ABS volume to nearly $1 billion. The latest […]

• Nicole Casperson
• July 8, 2019
• Capital Markets