We expect Fitch's Prime Chargeoff Index to decline to a new low. We also believe the Prime 60+ Day Delinquency Index will reach an all-time low. We believe that the highly seasoned accounts and high borrower FICO scores of the obligors in these trusts are combining to push performance metrics to new records. We expect Fitch's Prime Gross Yield Index to rise modestly. It also rose slightly in the May reporting period but remains in a healthy range. We believe Fitch's Prime Monthly Payment Rate (MPR) Index will decline, but not at a rate that suggests risk to ABS pools.
Fitch's retail indices are also expected to improve, but not reach to new records. Fitch's Retail Chargeoff index should decrease a few basis points. We expect a small rise in Retail 60+ Day Delinquencies will indicate normalization from the records set in the May reporting period. Gross yield and MPR will decline slightly but also remain in range of their records.
Over the longer run we expect some normalization of most of these indices as some economic indicators have been improved inconsistently. Consumer spending climbed just 0.2% in May. It was nearly flat in April.
Actual results will be available in early August.
Additional information is available on www.fitchratings.com.
The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.
U.S. Structured Finance
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Source: Fitch Ratings
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