Investors see opportunities in subprime auto bonds

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By Jennifer Kang
12 May 2020

The market is split on its outlook for subprime auto ABS, but while conservative investors are staying away there is growing optimism among others who believe credit enhancements and prospects for a strong economic recovery make the asset class an attractive buy in the time of coronavirus.

Since March, there has been no shortage of subprime auto ABS deals moving through the primary pipeline. A total of eight sponsors issued deals, including American Credit Acceptance, which priced a transaction on Monday.

The surprisingly consistent demand for subprime auto deals is probably a result of ...

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