Auto ABS

The captive-finance arm of General Motors is the first automotive lender this year to launch a securitization to finance inventories as dealerships rebound from COVID-19-related economic stresses.

The share of 78-month loans is at 14.9%, compared to approximately 10% in World Omni's previous issuance from its subprime/nonprime shelf.

For the second consecutive month, the average extension rate in June for troubled loans due to pandemic-related stresses on borrowers shrank in both prime and subprime loan sectors.

Tesla last week priced its latest auto-lease securitization at signficantly reduced spreads from its last deal—reflecting strong investor demand for TALF-backed securities and an improving outlook for the world's largest battery-electric vehicle (BEV) manufacturer.

Credit Acceptance Corp.'s second securitization of 2020 has a higher loss rate than the first deal due to COVID-19 worries, as well as rising loss levels in the lender's recent-vintage securitizations.

More than $2.5 billion in new subprime auto securitization deals hit the market this week, including a portfolio of indirect loans pooled by first-time issuer First Help Financial.

Nissan Motor Acceptance Corp. recently filed a prospectus with the SEC to issue $1.3 billion in a mix of fixed- and floating-rate notes, and quickly priced the offering for coupons significantly lower than its $1 billion transaction in late April.

The changes in terms on Byrider Finance’s subprime auto ABS deal compared to its predecessor illustrate how the COVID-19 pandemic is taking its toll.

Driven Brands is preparing a $175 million asset-backed securities deal that will provide investors with exposure to a relatively safe industry during the coronavirus pandemic.

Subprime auto ABS market participants do not see its outlook worsening significantly as a result of the pandemic, but most anticipate losses.