Dominion Bond Rating Service is touting its newly released rating methodology for auto ABS in the U.S. as a progressive approach, potentially accommodating single-B rated auto issuance.

"The auto market has not seen as much in the way of double-B and single-B tranches as some other asset classes have," said Chris O'Connell, vice president at DBRS. "We don't think we'll see much in those classes anytime soon, but we wanted to develop a framework for approaching those classes." To that end, the Canadian-based rating agency, which entered the U.S. market last fall, included recovery levels and stress levels appropriate to bonds on the lower end of the rating spectrum for auto ABS.

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