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

    NEW YORK--Standard & Poor's CreditWire--Feb. 28, 2001--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 (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