medium · Asset-Backed Securities collateral
In an auto ABS transaction, which factor typically drives 'front-loading' of the loss curve in a rating agency stress scenario?
- The 'burnout' of high-quality borrowers in the first six months.
- The immediate onset of a recession following issuance.
- The rapid depreciation of new vehicles in the first year.
- High initial interest rates that discourage borrowers from refinancing.
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