ABS Alert: Under the hood

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ABS Alert: Under the hood

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ABS Alert

Under the hood

24 July 2026Weakness continues but stabilization is possible

We expect somewhat softer credit performance across most consumer debt and Securitized Products Strategy

consumer-related ABS, with increasing prospects for stabilization as the year United States

progresses. Chris Flanagan

FI/MBS/CLO Strategist

BofASModestly higher delinquencies +1 646 855 6119

Based on our asset level database for retail auto loan ABS, regardless of credit score or christopher.flanagan@bofa.com

income level, 30+ days delinquency (DQ) rates have trended higher from the lows seen in Theresa O'Neill

early to mid-2021. Meanwhile, the YoY rates of deterioration (as measured by YoY ABSBofASStrategist

changes in DQ rates) are below peak levels but have recently trended up. +1 646 855 9285

theresa.oneill@bofa.com

Alvin FungPerformance trends by credit score and income buckets ABS Strategist

Our asset level database for retail auto loan ABS shows lower credit score buckets have BofAS

weaker credit performance than higher credit score buckets. However, the pace of +1 646 855-9091 alvin.fung@bofa.com

deterioration has varied across credit buckets over time. For instance, after compressing

to a trough in 3Q23, dispersion across credit score buckets began to widen before

subsequently tightening again. Over the past year, the dispersion has increased but See Exhibit 32 on page 12 for commonly used

remains relatively tight. Currently, the rate of deterioration is highest for nonprime (3- acronyms

month average of 12%) and lowest for superprime (8%%). Meanwhile, the lower income

Don’t miss these reportstercile has the highest delinquency rate but the higher income tercile has the highest