NEW YORK — Still-strong wholesale vehicle values resulted in
yet another decline for U.S. auto ABS losses, according to the latest index
results from Fitch Ratings.

Analysts said October auto ABS losses also remained stable
as the new model season kicked into gear for vehicle sales.

Fitch pointed out the Manheim Used Value Index gained 1
percent, increasing to 121.9 in October from 120.7 in September.

"Used vehicle inventories have remained tight for the past
year and a half, post-recession, challenged to meet demand and thus driving up
values," analysts said.

Prime cumulative net losses continued to drop through
October recording the lowest level to date at 0.30 percent, a 6-percent
improvement month-over-month from September. This is a 50 percent decline
year-over-year as borrower credit quality of newer ABS has improved through the
year.

Fitch found 60-day delinquencies also dropped for prime auto
loans to 0.37 percent for October. This reading is a 23 percent improvement year-over-year
and a 5-percent drop month-over-month.

"Prime sector delinquencies have stabilized with the U.S.
economy showing gradual (albeit protracted) improvement," Fitch said.

The firm indicated subprime delinquencies have also remained
stable through the second half of this year with negligible movement in levels
since June.

Analysts determined 60-day subprime delinquencies came in at
3.73 percent in October, a 7 percent increase month-over-month and 20-percent increase
YOY.

Fitch found October annualized net losses improved year-over-year
for both prime and subprime sectors while losses ticked up month-over-month
Prime ANL rose to 0.34 percent, marking a 40 drop year-over-year but a 21-percent
jump month-over-month. Subprime ANL improved 7 percent year-over-year but
deteriorated 14 percent month-over-month.

Fitch's auto ABS indices comprise of $62.36 billion of
outstanding notes issued from 118 transactions.

Of this amount, 76 percent comprise prime auto loan ABS and
the remaining 24 percent subprime ABS.

"Fitch's outlook for prime auto ABS asset performance
heading into 2013 is stable, while ratings performance outlook is positive for
prime auto ABS," analysts said.


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