Subprime auto ABS credit enhancements spark debate
ABS industry players have expressed mixed views this year on the trend of increased credit enhancement on subprime auto deals, with some observers starting to question whether deal structures will hold up during market shocks.
The subprime auto ABS market, which went relatively unscathed throughout the subprime mortgage crisis, has seen increased credit enhancement for many deals issued in 2017, as buyers demanded structural protection as fears around subprime auto loan quality increase.
However, some in the market believe that although credit
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