S&P: Reduced Auto Sales to Limit Auto ABS?

    NEW YORK, Feb. 28 The anticipated reduction in new-vehicle
sales in 2001 could constrain financing levels and possibly securitization
volume in 2001, according to a new report by Standard & Poor's titled "Auto
Loan ABS Market Gains from Corporate Bond Market Woes."  However, a negative
outlook for the auto sector could benefit the auto securitization market.
    To date, there have been no downgrades or defaults on any Standard &
Poor's-rated investment-grade auto loan asset-backed securities (ABS) due to
poor performance.  To the extent that there have been downgrades in the
investment-grade auto ABS market, they have resulted from the downgrading of
the credit enhancement provider, usually a letter-of-credit bank.
    Although credit performance remained strong for many auto finance
companies throughout 2000, the weakened economy could put upward pressure on
losses.  Lower stock-market valuations and manufacturing layoffs will reduce
the wealth that has accumulated over the past few years and put some highly
leveraged consumers into default.  Also, finance captives, which are beholden
to their parent manufacturers, may be pressured into lowering their credit
standards to help the manufacturers alleviate high inventory levels and make
room for new models.
    The report is available on Standard & Poor's Web site at
http://www.standardandpoors.com/ratings.  Click on Forum.  Then, under Ratings
Commentary, click on Structured Finance.  The report is also available on
RatingsDirect, Standard & Poor's Web-based credit analysis system.
    For more information, members of the media may contact Lisa Tibbitts,
media relations manager, at (1) 212-438-7530, or
lisa_tibbitts@standardandpoors.com. -- CreditWire