Subprime ABS buoyed by skin in the game — S&P
Subprime auto ABS performance is holding up, said analysts at S&P Global Ratings this week, with transactions weathering the recent spate of loan delinquencies thanks to skin in the game on the part of the issuers.
The analysts noted that holding the first loss piece and shouldering losses when they are “higher than expected” has helped absorb losses that would have otherwise hit bondholders.
“The excess spread which would otherwise have been released to them, has been trapped in the transactions to cover credit
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