Credit enhancement on the decline in marketplace loan ABS deals

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By Jennifer Kang
17 May 2019

Credit enhancement levels have been shrinking meaningfully in ‘A’ rated notes of frequent marketplace loan ABS issuers since 2017, according to Fitch Ratings research published this week.

The decline suggests investors involved in the more recently issued transactions are less protected from the same amount of asset risk as had been issued in previous deals, according to the rating agency.

What could warrant such a reduction in enhancement would be improved collateral quality or better loan ...

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