Prime auto ABS

The Fed's TALF program to support AAA-rated ABS securities issuance continues to resonate in the prime auto securitization space.

S&P Global Ratings has projected slightly higher investor loss levels for BMW Financial Services' first 2020 auto-loan securitization, compared to the captive-finance auto lender's previous deal in 2019. But that loss range (0.9%-1.11%) still remains minimal.

The captive-finance lender for General Motors is providing lower expectations for the vehicles' future residual values, compared to its prior lease ABS deals, in recognition of the likely severe recessionary impact of the coronavirus outbreak.

Ratings agencies are projecting slightly increased bond losses for American Honda Finance Co.’s next billion-dollar auto-loan securitization.

VW Credit becomes the seventh lender to offer asset-backed bonds since the Federal Reserve announced TALF backing of prime auto ABS notes to support stimulus efforts for the COVID-19 ravaged market.

Ford Motor Credit has emerged with a new issuance of auto-loan backed securities, joining a select group of prime auto ABS issuers confident in drawing in investors despite a gloomy, pandemic-afflicted outlook for the automotive industry.

Over 236,000 prime and subprime vehicle-loan borrowers received payment deferrals of between 30 and 120 days during the early economic turmoil of the coronavirus pandemic, according to the ratings agency.

The new-issue pipeline of prime auto loans remains open despite the gloomy forecasts for pandemic-related stresses on auto sales and consumer unemployment levels.

Weakening fortunes in the auto industry from the COVID-19 pandemic is prompting elevated loss expectations for a new-issue portfolio of prime automobile loans originated and serviced by Hyundai Capital America.

GM Financial's next auto-loan securitization is expected to have more front-loaded losses due to pandemic-related stresses