Delinquencies on auto ABS are now above pre-pandemic levels, while losses are approaching the same threshold. Still, rating services aren’t too concerned, noting used vehicle prices and unemployment levels.

While the Biden administration’s student loan debt forgiveness program doesn’t apply directly to borrowers with private student loans in ABS, prepayments on the loans are expected to increase.

The Inflation Reduction Act will likely increase solar ABS transaction volume and improve performance, KBRA said, due in large part to its enhancement of an existing investment tax credit.

Higher interest rates aren’t cutting into the issuance of auto ABS this year and there are few concerns about loan performance.

According to Equifax, the 60+ day delinquency rate on subprime auto loans hit a record in March. S&P countered that Equifax is double-counting loans, adding that delinquencies aren’t at record levels in the ABS market.

Both delinquencies on securitized student loans and prepayment rates on student loan ABS are up and could increase further due to the Biden administration’s efforts to help distressed borrowers.

Aviation ABS tied to Russia and Ukraine hit with downgrades; Pennsylvania’s private student loans deals from 2020 and 2021 upgraded; KBRA adds Opportunity Zone identifier to commercial MBS tracking; credit card ABS performance expected to decline.

MBS and ABS tied to floating-rate assets could see rising delinquencies as interest rates increase. Inflation also remains a concern, though Fitch and Moody’s suggest that most deals can weather the storm.

Net losses, recovery rates and delinquencies for auto ABS took performance hits in January, according to S&P.

The performance of MBS and ABS isn’t expected to be directly impacted by the fallout of Russia’s invasion of Ukraine in the near term; prepayment rates on agency MBS declined in February.