The newest S&P Global Ratings report indicated the U.S. auto loan asset-backed securities (ABS) market in November performed where finance companies likely expected, especially for participants within the subprime space.
And when analysts extracted a trio of companies that securitize paper in the deep part of subprime, the metrics looked even more in line with presumed expectations.
S&P Global Ratings explained, “The subprime segment saw mixed performance, with losses and delinquencies weakening on an annual basis and recoveries improving moderately.”
The data from S&P Global Ratings showed that subprime losses increased to 9.33 percent in November from 9.19 percent in October and 8.84 percent in November 2017.
However, after netting out three deep subprime securitizers, analysts found that their modified subprime index showed that losses decreased to 7.08 percent in November from 7.25 percent in October and 7.16 percent in November 2017.
Meanwhile, S&P Global Ratings mentioned the U.S. prime auto loan sector continues to report improved performance.
Prime credit losses have declined year-over-year since April, decreasing to 0.65 percent in November from 0.69 percent in October and 0.75 percent in November 2017.
“Tighter credit standards, better pool mixes and compositional factors have contributed to the reduction in prime losses,” analysts said.
S&P Global Ratings also noted recoveries increased year-over-year during November, rising to 56.4 percent from 50.7 percent for prime, to 37.9 percent from 37.4 percent for subprime, and to 38.6 percent from 37.9 percent for its modified subprime segment