Fitch: Prime Auto ABS Performance Shows Some Signs of Improvement During October While Monthly Issuance Levels Soar.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 20, 2003 Delinquencies on prime auto asset-backed securities Asset-backed security A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate. asset-backed security A debt security collateralized by specific assets. (ABS) improved 15% dropping to 0.51% in October, while weighted average cumulative net losses for prime borrowers dropped 9.6%, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the latest edition of 'In the Auto ABS Driver's Seat', a monthly newsletter issued by Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. . However, annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. net losses rose 12% to 1.54% as prior months' late-stage delinquencies rolled into defaults and weakness persisted in segments of the auction market, Fitch remains cautious on auto ABS performance going into the fourth quarter, a seasonally weaker period. In the subprime sector, delinquencies edged up 5.5% to 3.37% in October, while annualized net losses jumped 13% to 9.50%. Subprime auto ABS, generally composed of older model vehicles, tend to experience higher loss severities. During year-end, recoveries are seasonally lower, as dealer demand drops, coinciding with historically seasonally lower wholesale sales and vehicle values. Auto ABS issuance accelerated in October recording the highest monthly issuance in 2003 to date, with 13 auto loan, lease and dealer floorplan transactions totaling $10.96 billion coming into the market. Fitch anticipates auto ABS issuance to continue at a solid pace, as issuers attempt to deals to market prior to year-end. The latest edition of 'In the Auto ABS Driver's Seat driv·er's seat n. A position of control or authority. ,' a monthly newsletter that tracks retail auto loan performance, auto industry trends, and developments in the auto ABS securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. market, is available on the Fitch Ratings web site at 'www.fitchratings.com' in the 'Newsletters' section corresponding with the 'ABS' sector page, or by contacting the Ratings Desk at +1-800-893-4824. |
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