NEW YORK, Feb. 5 /PRNewswire/ -- Despite an anemic economy and rising
unemployment, issuance volume of auto loan-backed securities continued
unabated in 2001. The year marked the seventh consecutive year of record
issuance volume, as Standard & Poor's rated over $87 billion in auto-loan
backed transactions.
However, 2001 also heralded a turning point in credit performance. Credit
losses, which had been heading down from 1998 through most of 2000, turned
upwards in 2001. Higher bankruptcies, increased unemployment, and lower
recovery rates at auction combined to put greater pressure on finance
companies. Delinquencies likewise rose substantially in 2001, outpacing the
prior-year levels and raising warning signs for the coming year.
"The credit picture overall in 2002 is going to remain weak," said Paul
Kelly, managing director of auto loan ABS and one of the report's authors.
"But ABS issuances will become a more attractive source of fundraising as
corporate access to other low-rate financing diminishes."
These trends in ABS credit are described in a new report issued by
Standard & Poor's, "U.S. Auto Loan Securitization Grows Despite Rising
Losses." It can be found on RatingsDirect, Standard & Poor's web-based credit
analysis system, at http://www.ratingsdirect.com. The report is also available
on Standard & Poor's Web site at http://www.standardandpoors.com. Go to Forum
and under Ratings Commentary choose Structured Finance. The article can be
found under Asset-Backed Securities Ratings.
SOURCE Standard & Poor's
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Related links:
http://www.standardandpoors.com/ratings
CONTACT:
Paul L. Kelly, +1-212-438-2507, or
Christopher Conroy, +1-212-438-2432, both of Standard & Poor's
Ratings Services
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