In related news, Moody's Investor Services last week released a report detailing the improvement in subprime auto-loan collateral performance.

"In terms of highlights, we see continuation of performance improvements," said Kumar Kanthan. "The industry's been through some bad times - 1996 and 1997 - and we've really seen a turnaround since then, and the indexes are beginning to reflect that."

"[In this report] we looked at the vintage analysis on an issuer-by-issuer basis, and compared different issuers, and put them into categories," Kanthan said. Moody's placed issuers into two categories: those which outperformed the aggregate for the high-loss segment over a given time period, and those which didn't.

Though different issuers outperformed the aggregate at different times, "only one company outperformed the index consistently, and that was [Americredit Corp.]," said Kanthan.

Kim Welch spokeswoman for Americredit, said, "I can't speak to our performance relative to others. I can only elaborate on our strategy, which over time has been to further refine our empirical methods, which are our risk management techniques, and to understand credit quality at loan origination, and to trade risk for return across that time period."

Though the overall collateral performance of subprime auto has improved according to Moody's report, this does not necessarily signal portfolio deterioration.

Instead, Kanthan said it may reflect a fundamental shift in the shape of the aggregate industry loss curve, where a greater percentage of losses are now occurring later in the life of the loan.

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