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Auto ABS Doing Well, Reports S&P

April 14, 2008

NEW YORK — Despite the recent economic downturn, U.S. auto loan asset-backed securities (ABS) are doing "moderately well," according to the Associated Press’s recent report on finding from Standard & Poor's Ratings Services.

Auto loan ABS issuance saw a 7-percent increase in the first quarter of 2008, reaching $14.9 billion. Among the finance companies issuing those ABS, the three domestic captives sold almost $9 billion combined, which is three times what they issued during the same period last year.

Although auto loan ABS are strong, they are more difficult for finance companies to sell this year, as risk assessment is getting tougher, funding new deals is getting more expensive, and issuers are feeling resistance from investors, S&P said.

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