Jan 03 - The end of 2012 brings continued strong performance
for U.S. prime auto ABS while subprime loans again took a step back, as
expected, according to the latest index results from Fitch Ratings.
Prime auto ABS produced the strongest year to date with losses dropping to
record low levels, ranging from 0.14%-0.53%. As Fitch predicted, subprime auto
ABS performance has declined over the past six months, driven by the typical
weak fall season going into late 2012.
Factors supporting performance in 2012 included the recovering U.S. economy
albeit volatile, strong used vehicle values and high recovery rates, and strong
collateral characteristics and solid performance of the 2009-2011 vintages to
November saw the Manheim Used Vehicle Value Index rising to 122.6 from 121.9 in
October, as wholesale vehicle values was strong and values rose due to increased
demand and tight inventories due to the effects of Hurricane Sandy. Although
wholesale vehicle values came down from peak levels seen earlier in the year,
they are holding strong going into 2013. Fitch expects used vehicle values to
continue this trend in 2013 albeit at somewhat lower levels.
Prime 60+ day delinquencies dropped to 0.36% in November from 0.37% in October.
This represents a 21.7% improvement year-over-year (YOY). Prime cumulative net
losses (CNL) also dipped in November, improving 3.3% month-over-month (MOM) and
48.2% lower than in November 2011. Prime annualized net losses (ANL) were 0.36%,
slightly above October's level (0.34%) but were 32.1% stronger YOY.
Subprime 60+ day delinquencies came down 5.4% in November to 3.53%. However, ANL
rose to 6.72%, a 4.4% increase MOM and 0.5% rise YOY.
U.S. auto ABS issuance has been buoyant in 2012. Driving the strong issuance
numbers are higher new and used auto sales this year, the expanding consumer
credit market, availability of new improved vehicle models and the aging U.S.
Fitch's auto ABS indices comprise of $67.19 billion of outstanding notes issued
from 121 transactions. Of this amount, 75% comprise prime auto loan ABS and the
remaining 25% subprime ABS.
Fitch's outlook for prime auto ABS asset performance heading into 2013 is
stable, while ratings performance outlook remains positive for prime auto loan