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Trends in subprime auto lending and related ABS have evoked comparisons to the subprime mortgage market. Where many see a potential crisis, others point to significant differences to pre-financial crisis RMBS. To shed light on the issue, the Credit Chronometer has identified historical indicators of performance – within lending practices, securitization practices and the underlying market for the assets backing the pooled loans – and analyzes the market using a disciplined comparative approach.
The Subprime Auto Loan Chronometer provides a quick view of risk in the market based on the indicators of crisis and their prevalence in subprime auto lending and ABS today.
Listen to a recent ValueWalk’s Value Talk Podcast to hear Joseph Cioffi discuss the direction the subprime auto market is headed, the current regulatory landscape and the results of Credit Chronometer’s recent auto market study.
Davis+Gilbert’s Insolvency + Finance Practice Group represents clients in a broad range of corporate, insolvency and litigation matters. The group has been actively involved in many of the most notable and highly visible business events in recent years related to the last economic downturn and has vast experience in the area of subprime lending, including the operation of origination platforms, relationships with servicers and defending large-scale asset-backed securities litigation. The broad and diverse experience of their attorneys makes them particularly well-equipped to advise clients in rapidly evolving markets, such as, those for auto loans, student loans, marketplace lending, mortgage loans and environmental, social and governance (ESG) investing. Additional highlights of the practice include the following:
Litigation: The group regularly prosecutes and defends litigation involving complex financial transactions and instruments and has defended asset-backed securities litigation, including for residential mortgage-backed securities (RMBS), encompassing fraud and repurchase claims, involving nearly $2 billion in claims.
Bankruptcy: The group guides clients through financially distressed situations and helps formulate and execute creditor enforcement strategies, in particular, in the case of intermediaries facing obligations to third parties. The group has defended nearly $1 billion in fraudulent transfer claims brought by the trustee for the liquidation of Bernard L. Madoff Investment Securities LLC.
Corporate: The group also advises on a full range of financing transactions, including secured revolving and term credit facilities, receivable financing arrangements, intercreditor agreements, warehouse lending facilities and loan purchase agreements.
For more information about the Insolvency + Finance Practice Group, click here.
Joseph Cioffi recently sat down with William Hoffman, Associate Editor of Auto Finance News, for an episode of “The Roadmap,” a podcast from the Center for Auto Finance Excellence, a site dedicated to providing best practices for auto finance industry executives and investors. Joseph and William discussed trends apparent in recent subprime auto loan securitizations, and the outlook for the market going forward, including a close look at the interrelationships between credit enhancements, credit quality and credit ratings.
The discussion builds on Joseph’s thoughts first shared on a post on Credit Chronometer. Following the warnings in the post, several new issuances have been marked by higher credit enhancements, but also lower credit quality.
Listen to the full podcast here.