DBRS Releases December 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 the individual transaction page to the corresponding Enhanced ABS Report for that particular issuance.

The total outstanding amount of the Canadian ABS market was $31.4 billion at the end of December 2013, down 1.4% from the previous month’s outstanding amount of $31.8 billion. Regular runoff amounted to $185.8 million. There were no new issuances in the month.

On December 9, 2013, DBRS noted that there was no rating impact on the outstanding rated notes issued by CARDS II Trust following the removal from the Trust’s custodial pool of approximately $3 billion in Aeroplan-branded credit card receivables by Canadian Imperial Bank of Commerce, the originator of receivables in the Pool.

The overall term ABS market grew by 4.5% year over year with the securitization of credit card receivables dominating the term ABS market once again, representing 54% of total new issuance. In 2014, term ABS issuance is expected to fall as existing credit card programs have little room to expand based on the size of their current custodial pools. New issuance is expected to be driven mainly by refinancing of some of the scheduled maturities of $4.8 billion. However, DBRS expects that at least $1 billion of those notes will not be refinanced as Trusts that are originally American are likely to be wound down after the repayment of all outstanding notes.

Credit cards remain the largest asset class within the ABS market, comprising 77.4% of the market, followed by auto loans and auto leases, which decreased to 7.4%, and home equity lines of credit, which increased slightly to 4.9%. The ABS market composition continues to favour consumer lending and mortgage obligations, which account for approximately 92.9% of issuance outstanding.

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

The full report providing additional analytical detail is available by clicking on the link under Related Research at the right of the screen or by contacting us at info@dbrs.com.