By Moody's Investors Service Associate Vice President, Wing Ng and Associate Analyst, Wei Hu

Changes over time in the weighted average coupon, or WAC, of a securitized pool of auto loans can have a significant impact on the amount of excess spread in the transaction. The amount of available excess spread is critical to assessing the total amount of credit enhancement protecting bondholders, both at the time a transaction is initially rated and over its life.

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