NEW YORK--May 30, 2012: It was not a case of April showers for U.S. auto loan ABS performance, which again was stellar this past month, according to the latest index results from Fitch Ratings.
Prime auto asset-backed securities (ABS) delinquencies and losses dropped in April to the lowest levels recorded in 2012. Performance was buoyed by the solid 2009-2011 vintages, which are recording record low loss rates to date.
Over 50 transactions from the poor performing 2006-2008 vintages paid off in the past four-to-six months. Fitch's indices also reflect the strong 2009-2011 vintage deals. Additionally, April is typically the strongest month of the year thanks in part to tax refunds. These combined factors drove performance in April, as prime annualized net losses (ANL) hit a new record low.
Prime 60+ days delinquencies dropped 5.7% in April over March to 0.33%. ANL slid 50% month-over-month (MOM) to 0.17%, a new record low. Prime auto loan ABS cumulative net losses (CNL) declined 6.8% to 0.41% in April over March, and were 43.8% lower year-over-year (YOY).
Wholesale vehicle values were strong in April, although used vehicle values came off their peak March levels. The Manheim Used Vehicle Value Index was at 126.1 in April, just below the 126.2 March level. Recovery rates in auto loan ABS transactions are at historic highs in 2012, containing loss severity and keeping a lid on loss rates.
Performance in the subprime sector exhibited similarly positive movement in April. ANL declined 11.7% MOM to 4.16%. 60+ days delinquencies also dropped to 2.33% in April, 9% lower MOM versus March. However, subprime auto delinquencies remain 35% higher than April of last year.
Fitch's 2012 outlook for prime asset performance is stable, while the outlook for prime ratings performance is positive.
Fitch's auto ABS indices comprise of $56.79 billion of outstanding notes issued from 114 transactions. Of this amount, 79% comprise prime auto loan ABS and the remaining 21% subprime ABS.
Additional information is available at 'Fitch Ratings.
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