NEW YORK –

Collateral performance in the subprime U.S. auto loan asset-backed securities (ABS) sector in May was mixed, according to the most recent S&P Global Ratings report.

Analysts discovered subprime auto loan ABS month-to-month declines in both losses and recoveries during May. However, S&P Global noticed losses rose year-over-year and delinquencies increased both month-over-month and year-over-year.

Meanwhile, in the prime space, analysts noticed the data was generally positive in May. Even with recoveries receding, prime losses declined for the month, reaching their lowest level so far this year. S&P Global Rating pointed out this situation is not unusual, however, as losses often reach their lowest annual levels in May.

Overall, prime delinquencies and losses were stable year-over-year, according to the report.

Some of the key takeaways from the report include:

• U.S. prime auto loan credit losses improved month over month to 0.41% from 0.43% and were stable year over year.

• Subprime auto loan losses also improved month over month to 6.34% from 6.60%, but they increased from 6.00% year over year.

• Recoveries weakened month over month for both segments. But while prime recoveries worsened year over year, declining to 66.78% from 70.57%, year-over-year subprime recoveries saw a slight improvement, rising to 48.90% from 48.42%.

• The prime 60-plus-day delinquency rate was essentially flat both month-over-month and year-over-year at 0.36%, but its subprime counterpart increased to 4.51% from 4.31% in April and from 4.29% a year earlier.

“In June, we lowered our expected cumulative net losses for two deals, raised them for nine and maintained them for four,” analysts said. “We also took rating actions on four CPS Auto Receivables Trust transactions and on Sierra Auto Receivables Securitization Trust 2016-1.”