OREANDA-NEWS. Australian prime auto ABS losses and delinquencies improved over 3Q15, according to Fitch Rating's latest Dinkum ABS Index.

Annualised net-loss rate dropped 9bp to 0.51% in 3Q15. The seasonal decrease in 30+ day delinquencies of 28bp was due to borrowers recovering from arrears caused by holiday spending. Older transactions with relatively high arrears and losses were redeemed during the quarter and removed from the indices. Without these redemptions, delinquencies would have improved by 14bps.

During the quarter, losses remained low and below Fitch's expectations, despite the annualised net loss rate increasing 5bp year-on-year. The recovery rate increased to 47.1% from 35.4%, however the five-year average recovery rate fell two percentage points to 44% from 46% at end 2Q15.

Australian prime auto ABS issuance continued to remain modest in the third quarter of 2015; two auto ABS transactions were issued for a total of AUD1.3bn, while six transactions totalling AUD0.7bn, were redeemed. The outstanding collateral underlying the index fell by AUD1.4bn to AUD9.9bn.