Subprime lending

Subprime auto finance company Global Lending Services brought $300 million in notes to the asset-backed securities market GLS Auto Receivables Issuer Trust 2019-4.

The $450 million DT Auto Owner Trust 2019-4 has a pool balance of $519.7 million, an average balance of $17,125 per account and an 84.21% share of loans with terms over 60 months.

According to presale reports, the fixed-rate loan collateral in Angel Oak Mortgage Trust 2019-5 makes up 77.8% of the new collateral, compared to just 35.5% in Angel Oak’s previous deal that priced in July.

The transaction is the first securitization sponsored by the auto finance company since S&P Global downgraded four classes of subordinate notes in prior transactions due to higher-than-expected losses.

Arivo Acceptance, a two-year-old specialty-finance auto lender, is launching its debut securitization of subprime and non-prime loans for new and used cars, trucks and SUVs.

About 10% of the collateral pool consists of prime loans with extended term loans of 78 months excluded from World Omni's prime securitization platform.

The LendingPoint 2019-1 trust will market $169.4 million in notes backed by 18,760 loans with a collective balance of $178.3 million.

The decline in the share of "cured" delinquent loans is a potential signal for increased securitization losses in the months to come.

Lighter seasoning compared to American Credit Acceptance's last loan portfolio issuance is the primary reason, say ratings agencies.

“Buy here, pay here” auto lender Byrider’s improvements in recent ABS collateral performance and operational servicing changes are gaining favor with ratings analysts.

Kroll this week withdrew ratings on the defunct subprime auto lender's loan securitization, which had undergone multiple downgrades.

Foursight's first deal of 2019 has a rising 36.6% share of subprime borrowers from its lower-tier loan programs.

A decline in average FICO and recent loss levels in AmeriCredit's securitizations prompts Moody's to project slightly higher credit losses in the new transaction compared to previous rated deals.

S&P Global Ratings reports that cumulative loss levels on collateralized portfolios of subprime auto loans fell to 7.11% in March, compared to 8.67% in February. That figure was also down from 7.61% in March 2018, and the lowest since 2016.

A Davis & Gilbert poll of market participants showed more expect delinquencies over the next one to two years, likely requiring credit enhancement in future deals.

S&P Global Ratings forecasts lower losses in subprime lender American Credit Acceptance's next auto-loan securitization, citing the inclusion of performing loans transferred from a recently called deal.

Santander Drive Auto Receivables Trust 2019-2 has a lower average FICO (600) and lighter seasoning (two months) compared to SDART 2019-1.

Securitized loans originated outside the Qualified-Mortgage rule's parameters have looser underwriting guidelines than mainstream loans do today, but are more tightly underwritten than past subprime or alternative-A products, according to DBRS.

DT Auto Owner Trust 2019-2 will issue five classes of notes, collateralized by $550 million in auto loans issued through company-owned "buy here-pay here" dealerships.

Kroll has again downgraded the subordinate note classes for Honor Automobile Trust Securitization 2016-1, with total losses expected to build to $7 million to $8 million.