Chip shortage, virus working in favour of auto ABS for now

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By Jennifer Kang
22 Apr 2021

Auto ABS has surprised with its exceptionally strong performance since the fourth quarter of last year, bolstered by strong used car prices and steady demand. Market participants say the outlook is good for a few more months, with Covid-19 and the global chip shortage playing in favour of the asset class.

Several first quarter earnings reports posted this week by auto ABS issuers such as Ally Financial and CarMax pointed to stabilised credit trends and strong demand for new and used vehicles, thanks to government support and the shot of predictability that vaccines have injected into the ...

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