Finance

Consumer obligors represent a slight majority of the pool, 54%, while loans to commercial obligors represent the remaining 46%.

In the current pool, some 77.4% for all three pools are composed of tier A loans. This is slightly higher than the concentrations of tier A loans seen in several previous deals.

Just one previous transaction had experienced a loss, the rating agency said. That was the ARI 2021-A, and that transaction experienced a loss of just 0.02%.

Alyssa Irving sees bright production prospects for 2024 for a range of securitization assets, as the industry awaits rate cuts.

Issuance has been scant since DRIVE 2021-3 closed in November 2021. A lack of comparison deals from recent years makes it more difficult to forecast losses.

Indeed, investors are also positioning for Friday's consumer-price index revisions because of what happened a year ago: the update was significant enough to cast doubt on overall inflation progress.

CCCRT 2024-1's pool is fragmented by obligor, with the top obligor, for instance, accounting for only 0.84% of the pool by balance.

The deal has an underwriting debt-service coverage ratio (DSCR) of at least 1.0, and Morningstar says the issuer reports a loan-to-value ratio of 81.00%.

The underlying loans are fixed rate, and they are financing a lower percentage of new vehicles, 22.8%. The loans also have a lower weighted average front-end loan-to-value (LTV) of 95.5%.

Among the options is a synthetic risk transfer backed by a portfolio of about $5 billion of home loans originated when interest rates were lower.

Flat growth is expected for mortgages and auto loans, while credit card loan growth will slow down.

With a potential upsize to $1.3 billion, series 2024-1 features a potential floating-rate tranche benchmarked to the 30-day compounded Secured Overnight Financing Rate (SOFR).

The loans have a weighted average (WA) score of 781, the highest to date for the platform, and the deal also has several key positive credit highlights, including the lowest concentration of leases with terms greater than 36 months.

On a weighted average basis the loans have a 7.03% coupon and a remaining term of 4.9 years. All 24 loans are full-term, interest-only loans.

The share of loans in Arbor's CLOs that failed to make a scheduled payment more than doubled in the fourth quarter, according to preliminary data compiled by Banco Santander SA.

But Fannie Mae and Freddie Mac conducted no private-market sales of nonperforming loans early last year as adjustments were made to the program.

Some 630 residential mortgages provide the collateral for the deal, and that includes a substantial majority, 81.0%, that the rating agencies consider to be non-prime.

Most borrowers are small- and medium-sized companies that have a lot of incentive to service the debt from loans on property and casualty policies.

Credit strengths include a relatively fast amortization period, which can reduce exposure to loss risks, plus a collateral pool composed of frequently used, affordable smart phones.

Large and regional banks are taking different approaches to buybacks in light of the proposed new capital rules. Some plan to buy back stock at moderate levels this year, while others say they will to remain on the sidelines until there is more clarity about the reforms.