Marketplace Consumer Loan ABS Indices: October 2023

October remittance reports showed mixed credit performance across securitized marketplace consumer loan pools during the September collection period. KBRA’s Tier 1 annualized net losses landed at 8.57%, up 14 basis points (bps) month-over-month (MoM) but down 19 bps year-over-year (YoY), while the 30+ day delinquency rate declined 7 bps MoM but remained 78 bps higher YoY (see Figure 1). Meanwhile, our Tier 2 net loss metric fell 128 bps MoM but increased 378 bps YoY, coming in at 17.41%, while the percentage of receivables 30+ days delinquent remained unchanged MoM but increased 88 bps YoY to 6.72% (see Figure 2). Over the past 12 months, net losses and delinquency metrics have started to stabilize at a new range-bound level, likely due to tightening underwriting criteria implemented since 2022. However, both metrics will likely rise through year-end, given holiday spending and the resumption of federal student loan payments that started in October.

The data shown in this report and…