NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) releases its LTV Trends and Borrower’s Equity Position in Auto Loans research report.
Auto loan ABS has maintained relatively stable loan-to-value (LTV) ratios across sectors since 2012. Historically, most non-prime auto loans in ABS transactions are originated with a weighted average LTV above 100%, indicating that the loan amount is greater than the value of the vehicle financed. Higher LTVs, all else being equal, may result in higher loan defaults and lower recoveries.
This report describes some of the factors impacting a borrower’s equity position, how auto finance companies underwrite this risk, and the prominence of this trend in auto ABS transactions.
To view the report, click here.
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
Eric Neglia, Managing Director
Rahel Avigdor, Director
Jenny Ovalle, Director
Ted Burbage, Managing Director