NEW YORK -

Kroll Bond Rating Agency spotted typical season deterioration when analysts compiled their observations of the August auto loan indices based on performances in the auto asset backed securities (ABS) market.

Analysts said in their report released this week that collateral performance in KBRA’s Non-Prime Auto Loan Index continued to “underperform.”

For August, KBRA determined annualized net losses rose 98 basis points month-over-month and 21 basis points year-over-year to 8.27%. Meanwhile, the firm found the percentage of borrowers that were more than 60 days delinquent increased to 5.15% in August. That’s 16 basis points higher versus the previous month and 38 basis points higher than August of last year.

“The vast majority of issuers included in the index saw their performance deteriorate versus the previous month, which is likely being driven by seasonal factors, as the benefit of tax refunds has already dissipated and borrowers are spending on summer travel,” KBRA said in the newest report.

The August story is a bit different higher up the credit spectrum.

Annualized net losses in KBRA’s Prime Auto Loan Index ticked up 3 basis points month-over-month but fell 6 basis points year-over-year to 0.59%. KBRA said the percentage of borrowers more than 60 days past due edged 1 basis point lower month-over-month and 4 basis points lower year-over-year to 0.42%.

Analysts highlighted that August marked the 19th consecutive reporting period in which net losses and delinquency rates have fallen year-over-year within the prime index.

“Favorable year-over-year performance can be attributed to both index mix shift and tighter underwriting from a number of the prime issuers included in the index,” KBRA said.

The firm went on to mention an analysis of loan-level data from August showed some improvements in credit, as the percentage of prime and non-prime borrowers who went from 60 days or more delinquent to current rose to 21.5% and 14.7%, respectively, up from 20.8% and 12.8% during the previous month.

Analysts added the percentage of borrowers who were more than 60 days delinquent to start the August — and were subsequently charged-off by the end of the month — came in at 15.3% for prime paper and 23.2% for non-prime paper. Analysts noted these readings are essentially flat compared to the previous month when the percentage of seriously delinquent loans that were charged-off came in at 15.0% and 23.4%, respectively.