S&P: Auto Sales Spur ABS Growth; Volume Increases

    NEW YORK, Feb. 28 Record new-vehicle sales of about
17.4 million units last year contributed to growth in the auto loan asset-back
securities (ABS) market. However, most of the record-setting growth in sales
came during the first half of the year; sales fell markedly during November
and December, according to a new report by Standard & Poor's titled "Auto Loan
ABS Market Gains from Corporate Bond Market Woes."
    As a result, auto loan ABS volume soared 29% to $69.9 billion from
$54.1 billion in 1999. Public-only issuances in 2000 totaled $59.2 billion,
compared with $41.9 billion in the prior year. The total number of
transactions increased to 77 from 63 in 1999.
    The majority of the dollar growth resulted from increased securitization
volume from Ford Motor Credit Co. and DaimlerChrysler Corp.'s Chrysler
Financial unit. Ford Credit, the largest issuer last year, grew its issuance
by $8.15 billion to $19.77 billion, and DaimlerChrysler, the second-largest
issuer, grew its issuance by $3.4 billion to $8.2 billion.
    Both Ford Credit and DaimlerChrysler began to rely more heavily on the
ABS market in 2000. This increased reliance was primarily the result of the
companies' own internal problems that reduced their corporate credit quality
and made unsecured borrowing more expensive. Ford's troubles stemmed largely
from the Firestone tire recall and related lawsuits, while DaimlerChrysler's
related largely to the automaker's mounting losses.
    The performance of outstanding auto loan ABS remained relatively stable
for some auto finance companies last year, but others began to show signs of
weakness. Some companies reported higher delinquencies, several increased
their provisions for loan losses, and a few experienced slightly higher losses
on their more recent securitizations.
    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. It 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