Despite ratings volatility and concerns over near-term ABS coming due, the outlook on Mitsubishi Motors Credit of America (MMCA) retail auto ABS is not as grim as it appeared a year ago, according to research from Barclays Capital.

The risk associated with balloon loan payments is significant as balloon payments account for 26% and 27% of the 2001-3 and 2002-2 adjusted collateral balance, respectively, the report noted. However, the threat of those potential losses has been largely mitigated by the buildup of credit enhancement and support levels during the past 10 to 12 months.

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