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TEXT-Fitch U.S. auto ABS index: fork in the road widening for prime & subprime loans
February 5, 2013 / 2:05 PM / 5 years ago

TEXT-Fitch U.S. auto ABS index: fork in the road widening for prime & subprime loans

Feb 05- Performance for U.S. prime auto ABS is still on solid footing, while subprime loans are showing more weakness of late, according to Fitch Ratings in its new U.S. auto ABS index.

Auto loan ABS produced the strongest performance on record last year. Annualized net losses (ANL) on prime auto loan ABS are still resoundingly low (0.40% at December 2012), further testament to their resiliency. ‘As the wholesale vehicle market begins to normalize, losses will trend marginally higher, though not enough to deter the stable performance of prime auto loan ABS,’ said Senior Director Hylton Heard.

But while prime loans remain largely immune to the tepid U.S. economy, subprime loans are showing more vulnerability to it.

ANL on subprime auto loan ABS increased in each of the last seven months of 2012. December’s loss rate of 6.92%, though higher year-over, was still well below losses seen in 2008-2009. ‘Economic pressures, not surprisingly, are having a more severe impact on subprime auto loans so the next 12 months will bear closer watch,’ said Heard.

The U.S. Auto ABS Index is part of Fitch’s series of structured finance index reports, which are updated quarterly and available at ‘’ or by clicking on the above link. This new quarterly Auto ABS Index report replaces Fitch’s former ‘In the Auto ABS Driver’s Seat’ newsletter.

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