It's the issuer's first auto loan securitization of 2014. JP Morgan and RBS Securities are lead underwriters.
Captive lenders in the auto-loan lending space have reduced the share of subprime in their portfolios while the higher credit scores for used-car borrowers suggest healthier subprime metrics. But there's still risk, with lenders upping LTVs and terming out loans.
Sallie Mae is still interested in adding to its holdings of Federal Family Education Loan Program loans, even if it took a pass on a $3.6 billion portfolio that CIT sold to Nelnet this month.
The transaction, which was disclosed in a regulatory filing, includes the purchase of residual interests in a total of $2.6 billion of securitized student loans and related assets and approximately $950 million of unsecuritized student loans.
Santander and Ally Financial priced a total of $2.1 billion of bonds backed by subprime auto loan receivables on Wednesday.
Direct exposure to either J.C. Penney or Sears is typically highest in seasoned deals where there are only a small number of loans remaining, and one is secured by a retail property.
Banks have been slow to make credit cards available again to subprime borrowers; that's starting to change.
Card issuers are again lending to weaker borrowers; Its just a matter of time before the receivables show up in trusts.
FINRAs plan to disseminate pricing on after-market transactions in asset-backed securities through TRACE should transform the market.
Many banks in the auto lending business have been making investments that they hope will give them a more enduring edge; to the extent that bank are less likely to securitize these loans, this could impact securitization volume.