Bonds Backed by Subprime Auto Loans Shrug Off Soaring Delinquencies
- Broad repricing of risk assets has pulled BB rated debt lower
- Markets shrug off rising delinquencies for subprime borrowers
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Spreads on the lowest rated bonds backed by subprime auto loans have fallen to the lowest in a year, part of a broader tightening of risk assets that until recently had pulled the corporate bond market tighter as well.
Spreads on BB rated subprime auto bonds were 550 basis points as of Sept. 29, two full percentage points below the levels they reached after Silicon Valley Bank and Signature Bank collapsed and in line with levels from last September, according to data from Wells Fargo & Co.