Subprime lending

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.