Kroll upgrades CPS subprime auto bonds

By Jennifer Kang
11 May 2020

Kroll Bond Rating Agency has upgraded three classes of notes in three CPS subprime auto ABS deals, highlighting increased level of credit enhancements. Despite a lack of obvious red flags in the sector, even as the pandemic persists, sources warn that highly levered subprime auto sponsors still face a rocky road ahead as used car values plummet.

The ratings actions affected the ‘C’ notes for CPS 2017-A and CPS 2017-B, both of which were upgraded to AAA from a previous rating of AA+. The ‘B’ notes in CPS 2018-D were also upgraded from AA+ to AAA.

Kroll decided to upgrade the transactions as a ...

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