Further Ford Credit downgrade would spur higher ABS volume

MIAMI — Ford Motor Credit Co. is likely to ramp up its asset-backed securitization volume if S&P Global and Fitch Ratings downgrade the captive like Moody’s Investors Service did on Sept. 9, analysts told Auto Finance News at ABS East.  “If Ford were downgraded to non-investment speculative-grade status by S&P Global and Fitch Ratings as well, the […]

• Nicole Casperson
• September 23, 2019
• Capital Markets, Exclusive

Thinning margins spur Ford Credit downgrade

Ford Motor Co.'s weakened credit profile will likely have negative implications for its access to funding and financing volumes after a downgrade by Moody’s Investors Service this week. The downgrade moved Ford’s rating to non-investment speculative-grade status.  Moody’s said an upgrade for Ford is “unlikely in the near term,” as margins are expected to remain […]

• Nicole Casperson
• September 10, 2019
• Capital Markets, Credit Performance, Operations

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

Loose auto underwriting points to ‘weak’ credit outlook, Moody’s says

Lenders did little to tighten auto loan underwriting last quarter despite worsening delinquency trends. Last quarter, 3.5% of bank respondents in the Federal Reserve's Senior Loan Officer Opinion Survey reported to have somewhat tightened credit standards. The remaining 96.5% said standards remained basically unchanged. Given the "rapid rise in auto loan debt," however, banks would […]

• Bianca Chan
• August 7, 2019
• Credit Performance, Risk Management

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

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

Longer Terms, Revolving Period Are Risk Factor in Toyota’s Latest $1B ABS Deal

Toyota Motor Credit Corp. is bringing $1.13 billion in asset-backed securities to market in the captive’s first extended-loan securitization, which is expected to close on June 19, according to a pre-sale report by Moody’s Investors Service. TMCC’s newest deal is comprised of 54,385 prime auto loan receivables with an average FICO score of 754 and […]

• Nicole Casperson
• June 10, 2019
• Capital Markets