US ABS Credit Trends - Moody's

US ABS Credit Trends

William Black

Head of Consumer ABS New Issue, Americas

December 2016

Contents

1. Macroeconomic Backdrop

2. US Auto ABS

3. US Credit Card ABS

4. US Equipment ABS

5. Emerging ABS Sectors

?

Marketplace Lending (MPL)

?

Handset Financing

?

Property Assessed Clean Energy (PACE)

?

Solar

US ABS Credit Trends ¨C December 2016

2

1

Macroeconomic Backdrop

US ABS Credit Trends ¨C December 2016

3

Strengthening Labor Market

Unemployment Expected to Continue at Current Levels as Consumer Sentiment Remains Stable

Unemployment rate: Total, (%, SA)

Baseline Scenario (November 2016)

120

11%

100

Consumer Sentiment: Q1-66=100

10%

8%

7%

6%

5%

80

60

40

20

4%

Source: U.S. Bureau of Labor Statistics, Moody¡¯s Analytics

Sep-16

Apr-16

Nov-15

Jun-15

Jan-15

Aug-14

Mar-14

Oct-13

May-13

Dec-12

Jul-12

Feb-12

Sep-11

Apr-11

Nov-10

Jun-10

Jan-10

0

3%

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Jul-17

Jan-18

Jul-18

Unemployement Rate

9%

Source: University of Michigan

US ABS Credit Trends ¨C December 2016

4

Household Debt Service Ratio, (% of Disposable Inc., SA)

West TX Intermediate Spot: Cushing, (FOB $ per Barrel, NSA)

Baseline Forecast (November 2016)

Baseline Scenario (November 2016)

12.0%

120

11.5%

100

Source: Federal Reserve, Moody¡¯s Analytics

Jul-18

Jan-18

Jul-17

Jan-17

Jul-16

Jan-16

Jul-15

Jan-15

Jul-14

Jul-13

0

Jan-14

8.5%

Jan-13

20

Jan-10

9.0%

Jul-12

40

Jan-12

9.5%

Jul-11

10.0%

60

Jan-11

10.5%

80

Jul-10

Dollars per Barrel

11.0%

Mar-10

Sep-10

Mar-11

Sep-11

Mar-12

Sep-12

Mar-13

Sep-13

Mar-14

Sep-14

Mar-15

Sep-15

Mar-16

Sep-16

Mar-17

Sep-17

Mar-18

Sep-18

Percentage of Disposable Income

Household Debt and Oil Expected to Rise

Source: U.S. Energy Information Administration, Moody¡¯s Analytics

US ABS Credit Trends ¨C December 2016

5

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