Declining mortgage refinance rates are causing a slowdown in solar ABS prepayments, increasing risks for investors.

CRT deals involving auto loans typically have a pro rata structure, which can create more risks for investors than the sequential pay structure in ABS transactions. Structures are also evolving, including a deal issued by a nonbank in partnership with a bank.

Santander Consumer USA is a long-time issuer of auto ABS, but its affiliated Santander Bank only started originating auto loans in recent years. And to this point, the bank has issued only CRT with auto loans.

Higher vehicle prices and inflation are reducing auto lending to subprime borrowers and lifting the prime sector’s share of ABS issuance.

Issuance of home-improvement securitizations came in at $3.5 billion in 2023, according to Kroll Bond Rating Agency. Some of that volume was in privately-rated deals that haven’t been disclosed to this point.

The potential merger of the two credit card companies will result in significant consolidation in bank credit card portfolios and a new market leader.

The AAA-rated credit card ABS was issued by WF Card Issuance Trust, a de-linked credit card receivables-backed trust sponsored by Wells Fargo.

Huntington National Bank is in the market with its first auto ABS since 2016. The bank completed a credit-risk transfer transaction in late December involving a $3.0 billion pool of auto loans.

Purchasing Power partners with employers to offer employees funds for purchases of appliances, electronics and furniture. The firm doesn’t charge interest on the loans. Instead, prices on the items are marked up.

Lendbuzz, which focuses on an artificial intelligence-powered platform to underwrite auto loans, closed a AAA-rated $218.7 million ABS.