DBRS Releases August 2013 Canadian ABS and Enhanced ABS Reports

DBRS has today released the enhanced version of the Monthly Canadian ABS Report (the Enhanced ABS Report), in conjunction with the Monthly Canadian ABS Report.

The Enhanced ABS Report offers additional metrics, longer data series, definitions and charts that provide the user with both numeric and graphic presentations to allow for a quick review of the overall performance and trends for each transaction, as well as benchmarking of transactions within an asset class.

The Monthly Canadian ABS Report has links that allow the user to go from the table of contents or from the individual transaction page to the corresponding Enhanced ABS Report for that particular issuance.

The reports provide an overview of the Canadian term asset-backed securities (ABS) market for the month ending August 31, 2013.

The total outstanding amount of the Canadian ABS market was $28.9 billion at the end of August 2013, down 0.7% from the previous month’s outstanding amount of $29 billion. The decline in the overall ABS market size was a result of regular runoff, amounting to $180.1 million, and the discontinuation of one reverse mortgage note, CHIP Mortgage Trust, Series 2006-2B Subordinated Medium Term Notes for $10 million.

On September 3, 2013, DBRS published its mid-year review of the Canadian structured finance market. The review highlights the main trends and developments for the first half of the year. Canadian securitization continues to favour consumer-related obligations (auto loans and leases, credit cards and residential mortgages), which have increased 1% over the last six months, to represent 73% of the total asset-backed commercial paper (ABCP) and term ABS markets. The total securitization market grew by 1.8% during the first half of the year, to $96.5 billion in June 2013 from $94.7 billion in December 2012, mainly driven by new issuance in the ABCP market.

On September 6, 2013, DBRS published inaugural Canadian Housing Indicators (the Indicators). DBRS notes that Canadian household leverage seems to have plateaued, with adjusted debt to-personal disposable income falling to 151.6%, slightly higher than the comparable U.S. ratio of 140.0% at the end of Q1 2013. While residential mortgage growth continues to outpace gross domestic product by a few percentage points, mortgage rules introduced by the federal government over the past few years have restrained the growth of mortgage lending. DBRS will continue to review the contents of the Indicators and may include additional information in the future.

Credit cards remain the largest asset class within the ABS market, comprising 82.7% of the market. Auto loans and auto leases fell to 7.5%, followed by equipment finance, with a 0.2% decline to 3.8%. The ABS market composition continues to favour consumer lending, with credit card and auto loan/lease programs accounting for approximately 90.2% of the market.

Notes:
All figures are in Canadian dollars unless otherwise noted.