S&P Global Ratings this month downgraded four class ‘E’ notes of recent subprime auto deals issued by Consumer Portfolio Services from 2016 and 2017. Deutsche Bank analysts said this week that the move might imply the rating agency is growing more cautious on the sector, signaling that downgrade and default risks for subprime auto ABS are on the rise as the cycle turns.
S&P downgraded subordinated tranches of CPS 2016-B, 2016-D and 2017-A to a B+ rating from BB- after having been placed on watch downgrade in June. Losses in these tranches have been higher than expected at their current pool amortisation levels, S&P analysts wrote, and delinquencies have continued to
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