DBRS Releases February 2014 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 $29.6 billion at the end of February 2014, down 1.7% from the previous month’s outstanding amount of $30.1 billion. The decrease was mainly a result of the full repayment of SCORE Trust, Series 2004-1. Regular runoff amounted to $150.7 million. There were no new issuances in the month.

On February 20, 2014, DBRS released its annual review study “2013 Year in Review: Gold, Silver and Bronze,” which discusses the top performers in Canadian Structured Finance and possible headwinds going forward. According to the study, low interest rates continued to push Canadians to borrow more. While playing a key role in helping the Canadian economy recover from the Great Recession, continued consumer borrowing has resulted in high levels of household indebtedness relative to disposable income. “While this is cause for concern, the combined effects of conservative underwriting, modifications to mortgage lending rules and improving economic conditions have contributed to the excellent credit performance of securitized portfolios. In addition, growth in household consumer credit has been favourable to the securitization market, with outstanding issuance expanding by 2.4% during 2013,” says Jamie Feehely, Managing Director of Canadian Structured Finance.

Credit cards remain the largest asset class within the ABS market, comprising 77.1% of the market. Auto loans and leases fell to 7.1%, followed by home equity lines of credit, increasing slightly to 5.2%. The ABS market composition continues to favour consumer lending and mortgage obligations, accounting for approximately 92.8% of the market.

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.