KBRA Releases Research – Recovery Trends in Unsecured Consumer ABS

KBRA releases research examining the role of recoveries in consumer asset-backed securities (ABS), along with recent recovery trends segmented by borrower credit quality and deal vintage.

Recoveries are coming back into focus as recent unsecured consumer ABS vintages season and pandemic-era distortions fade, offering a clearer view of underlying collection performance. At the same time, a macroeconomic backdrop of higher prices and sustained inflation may weigh on recoveries by reducing borrower repayment capacity and increasing collection-related costs, which could soften voluntary repayment activity and net recovery outcomes. Given that recoveries represent the primary source of post-charge-off loss mitigation in unsecured consumer ABS, these dynamics have direct implications for net loss performance and transaction cash flows.

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