Auto Loan Securitizations Still Going Strong, Says Fitch IBCA
15 June 1999
Auto Loan Securitizations Still Going Strong, Says Fitch IBCA
NEW YORK--June 14, 1999--FITCH IBCA--Due to healthy investor appetite for short-term, highly rated liquid securities, attractive funding rates, and the rapid pace of vehicle sales, issuance of auto loan asset-backed securities (ABS) accelerated throughout the first half of 1999 and is expected to continue through year end.In conjunction with this increased issuance, Fitch IBCA, the international rating agency, has released its updated criteria for rating auto loan securitizations. The report discusses performance trends, analysis of collateral, credit analysis, and legal issues relevant to rating auto loans ABS.
The report also examines the trends that are shaping the auto loan securitization marketplace. According to the report, sales of new vehicles and light trucks topped 15.5 million units in 1998 and posted double-digit growth in the first quarter of 1999 due to the strong economy and low interest rates. In step with robust sales, first quarter 1999 auto ABS issuance outpaced 1998's first quarter by over 25%, and issuance should remain strong.
"Our current projections estimate 15%-20% growth over last year's volume, with prime retail loans backing the majority of this year's deals," says Associate Director Joseph Astorina. "Though the widespread consumer acceptance of leasing and balloon loans may encroach upon the supply of retail loans for securitization, the expansion of the auto finance market should continue to propel overall volume."
For a copy of the report, released June 11, see Fitch IBCA's web site at www.fitchibca.com or contact Market Services at 212/908-0500.