S&P Downgrades Outlook for Subprime Auto Bonds Due to Rising Delinquencies and Losses
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S&P placed subprime auto bonds from Flagship Credit Acceptance and CarFinance Capital on negative outlook due to worse-than-expected performance.
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Six Flagship Credit Auto Trust issuances are trending below initial expectations with higher-than-forecast cumulative gross losses.
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Total net losses in the six Flagship transactions jumped over 3 percentage points since the beginning of 2022 through October.
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Delinquency rates also increased in five of the six transactions.
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The concerns follow other recent issues in the subprime auto ABS market like pulled or tweaked deals.