Fitch Ratings: Auto ABS Delinquencies Highest Since 1999.Business Editors Despite signs of stabilization, the 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. delinquency index for auto loan 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) remain at their highest levels since early 1999, 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 Fitch's 'In The Auto ABS Driver's Seat' newsletter. Economic indicators Economic indicators The key statistics of the economy that reveal the direction the economy is heading in; for example, the unemployment rate and the inflation rate. have not provided a clear picture regarding the strength of the overall U.S. economy. 'The labor markets labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience remain sluggish and consumer sentiment has been wavering,' said Thomas Nieliwocki, Director, Fitch Ratings. 'Until the economy is able to clearly move in a positive direction, auto loan delinquency performance is likely to remain under pressure.' Prime auto loan ABS losses, along with delinquencies, are also stabilizing, with a current loss index of .89% that is in line with last month's rate. The used car market has regained strength as well, particularly in used vehicle pricing. 'With rental car company, corporate and municipal defleeting less of an issue and demand returning for used vehicles, wholesale markets should gather momentum in the near term,' said Nieliwocki. However, new vehicle sales slowed noticeably in May, reflecting the first substantial decline of 2002. The monthly total of 1.5 million units represented a 5.9% decline from last year's total, a decline attributed largely to high unemployment and a decline in 0% financing offers. 'In the Auto ABS Driver's Seat' is a Fitch Ratings investor publication 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. The current issue as well as previous issues are available on the web within FitchResearch, the Fitch Ratings subscription-based web site located at 'www.fitchratings.com' or by contacting Products & Services at 1-212-908-0800. |
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