Prime auto ABS

As more new-vehicle buyers flock to General Motors' high-ticket trucks and SUVs, GM Financial has to supply riskier 60-plus month loans to finance them. That's prompting higher net ABS loss projections from Fitch.

With sales recovering from the the fading diesel-engine emissions scandal from 2015, Volkswagen's U.S. captive finance arm is inviting prime auto-loan investors out for a drive for the first time since 2014.

The concentration of loans with terms of 73-75 months has breached 13%, after ranging from between 10-12% from five previous AART issues since 2016.

Five classes of notes will be issued in the transaction, BBVA Consumer Auto 2018-1, which is backed by a pool of well-seasoned loans on new and used cars that will revolve for an initial period of 1.5 years.

The average FICO for the pool of lease obligors is at a peak level for GM Financial's shelf, but Fitch expects higher losses on resale values on a pool more heavily dependent on longer-term leases and luxury models.

For the first time, the collateral includes lease contracts from its standalone Genesis luxury sedan line; two models, the G80 (base price $41,000) and G90 (base price $68,000) account for 4% of the total pool balance.

Industrywide, car sales were down last year, but there were record purchases of Civics and brisk second-half sales of the redesigned Accord; this is reflected in the model concentrations of HAROT 2018-2.

Trucks and SUVs make up 84.7% of the collateral for $1.58 billion Ford Credit Auto Owner Trust 2018-A, reflecting consumer declining demand for passenger vehicles.

Toyota Motor Credit $1.25B deal is its second captive-finance receivables securitization of 2018, with an upsizing option to $1.6 billiion.

Sixty-four consumer groups are speaking out against a Senate measure, expected to be voted on this week, that would overturn the Consumer Financial Protection Bureau's 2013 regulation on discriminatory pricing by auto lenders.