E-contracts pose risk in auto ABS, Moody’s says

An increase of e-contracts to originate auto loans and leases has created a new source of legal and operational risk to auto asset-backed securitizations, according to a Moody’s Investors Service report. Specifically, the use of e-contracts heightens potential risks related to the securitization trusts’ ownership of assets. A third-party could claim a superior interest in […]

• Bianca Chan
• December 5, 2019
• Capital Markets, Risk Management

Auto ABS volume surpasses 2018 levels

Auto asset-backed securitization volumes have already outpaced 2018’s yearend levels, according to data from JPMorgan Securities. Auto ABS volume hit $109.8 billion year to date, a 5.6% increase from 2018’s total, according to the Nov. 22 Global ABS/CDO Weekly Market Snapshot report. In fact, 2019 marks the third straight year that auto ABS volume has increased, […]

• Bianca Chan
• November 27, 2019
• Capital Markets

Testing the resiliency of auto ABS

The auto asset-backed securities market continues to attract investors — even from overseas. While market headwinds brought on by lengthening loan terms, trade disagreements and a potential economic downturn test the market’s resilience, closer examination of the auto ABS structure proves the strength of these bonds in the face of adversity. In fact, investor appetite […]

• Nicole Casperson and Joey Pizzolato
• November 21, 2019
• Capital Markets, Credit Performance, Exclusive, Features, Risk Management

Santander debuts $1.3B revolving ABS

Santander Consumer USA is bringing $1.3 billion worth of nonprime loans to market with the debut of its revolving asset-backed securitization slated to close Nov. 26, according to Moody’s Investors Service presale report.   The securitization pool consists of 66,522 contracts, with 43% of the pool comprised of new vehicles and 57% used. The weighted average […]

• Nicole Casperson
• November 19, 2019
• Capital Markets

Florida credit union issues $185M inaugural ABS deal 

GTE Federal Credit Union (GTE Financial) has prepped its first-ever securitization backed by $184.8 million in prime auto loan receivables, according to a presale report by S&P Global Ratings. The deal is expected to close Nov. 26. The securitization pool  has a “high concentration” of longer-term loans, with 62% of the pool consisting of loans with […]

• Nicole Casperson
• November 12, 2019
• Capital Markets

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