Late payments on subprime auto loans packaged into bonds have eclipsed 2009 recessionary levels and are now at a level not seen in nearly two decades, according to Fitch Ratings.

 Subprime delinquencies of 60 days or more hit 5.16% for February reporting, marking the highest level observed since October 1996 (5.96%). During the most recent recession, delinquencies peaked at 5.04% in January 1999. February’s delinquencies are increased 11.63% year-over-year and 3.63% month-over-month.

Subprime annualized net losses have followed the rise in delinquencies, reaching 9.74% as of February, an increase of 34.10% on the year and 11.59% on the month. Despite the increase, annualized net losses remain below the recessionary peak of 13.14% experienced in February of 2009.

Fitch attributes rising delinquencies to the growth in auto lending, increased competition among lenders and weaker underwriting standards over the past three years. This lending has been fueled by securitization: issuance of subprime auto loan backed securities averaged just over $20 billion in 2013 and 2014 before ballooning to over $25 billion in 2015, the highest level since 2005-2006. The number of lenders issuing asset-backeds also increased to 19 in 2015 compared to the previous high of 14 in 2005 and 2006.

Increased competition has led to increases in loan-to-value ratios and extended term lending. Additionally, lenders have marginally weakened credit standards, with particular increases in originations to borrowers with no FICO scores.

Fitch only rates ABS platforms sponsored by two of the larger lenders in the subprime sector, General Motors Financial (AMCAR) and Santander Consumer USA (SDART). Cumulative net losses (CNL) on their recent transactions from 2013 to 2015 are rising marginally but remain well within Fitch’s initial expectations. Enhancement growth has been strong despite slightly weakening performance and, as such, Fitch consistently upgraded subordinate bonds in 2015 and has continued to do so in 2016, thus far.

In contrast, performance within the prime sector remains stable, albeit slightly weaker. Sixyt-day-plus delinquencies stood at 0.46% for February reporting, up 9.27% on the month but flat on the year. Annualized net losses on prime auto loans has increased slightly in 2016, reaching 0.69% for February, increased 32.17% on the year.

While representing the highest level since February 2011 (0.90%), losses are still well below the historical average of 0.92% and the recessionary peak of 2.23% in January 2009.

Fitch considers the slight increases in losses to be more of a normalization trend within the prime sector as performance trends move away from historical lows experienced over the past five years. However, loss levels could rise further if loan-to-alue ratios and extended term lending are not adequately managed and continue to increase.

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