Subprime lending

DriveTime's improving loss performance in recent securitizations allowed it to relax the enhancement levels on its first securitization of the year.

Despite riskier terms, rising delinquencies and falling used car values, investors keep buying bonds backed by prime and subprime auto loans and leases.

The three offerings push the first-quarter volume of subprime auto loan asset-backeds past $5 billion, an indication of unwavering demand for the risky asset class.

The Detroit company recorded an 11% increase in car loans and leases originated during the fourth quarter, as well as a jump in yields. Ally appears to be benefiting from Wells Fargo's substantial retrenchment in auto lending.

The credit quality of the collateral appears to have improved, but investor protections have also decreased; as a result, Kroll is only assigning an 'A' to the senior tranche of notes.

The Salt Lake City-based lender homes in on troubled borrowers whose subprime status is primarily tied to a recent bankruptcy protection filing.

The Irving, Tex.-based specialty lender boosted senior-note credit enhancement levels and has stabilized portfolio losses to break the AA ratings cap on its deals, according to S&P Global Ratings.

Improved underwriting allowed the lender to secure AAA ratings despite offering the lowest credit enhancement on senior SDART notes in three years.

The lender's first deal of the year is sized at $750 million, in line with its two prior offerings, but the amount of collateral has been significantly increased, to over $1 billion.

The first issuance on its Finsbury Square platform marks the specialty mortgage originator's seventh securitization since 2010.

The first subprime auto ABS deal for 2018 is the 30th overall for Consumer Portfolio Services, with caters to deep subprime borrower pools.

Despite boosting credit enhancement, the sponsor was only able to earn an 'A' from S&P Global Ratings, which cited heightened competition and adverse borrower selection.

In its third securitization of cash-out auto loans, OneMain will for the first time include originations from the 1,000 legacy offices acquired from CitiFinancial.

Kroll expects cumulative net losses on the collateral for American Credit Acceptance 2017-4 to be as high as 29.9%; the senior notes have 66.35% initial credit enhancement.

More stringent underwriting is the likely reason banks and credit unions are seeing relatively low levels of delinquencies on car loans to high-risk borrowers.

Nearly one-third of the vehicles in CIG Financial's $172 million transaction have mileage above 100,000; the highest-mileage car financed has 197,387.

The company increased the concentration of sub-550 Beacon score borrowers to more than 13%, and cut the share of prime 700-plus loans by more than two-thirds from its prior deal.

The Dallas consumer lender says it plans to boost subprime originations again after retooling its portfolio and taking stock of the economy.

The deal, known as Bayview Opportunity Master Fund IVb Trust 2017-RT6, pools 2,745 current loans, of which nearly 58% have been clean for at least two years, and 55.2% have been modified.

The company is lending less and issuing smaller securitizations this year, but investors keep flocking to the subprime lender's paper.