Charge-offs, among “prime” credit card-backed securities, resumed its upward path in March hitting a new fourteen month high. Although the figure is only five basis points above January’s peak, it is 126 basis points above the year-ago level. The 60+ day delinquency ratio, which is an indicator of future charge-offs, also rose by three basis points in March to a new high since late 2005. According to FitchRatings, “prime” charge-offs for March were 4.36% compared to 4.13% in the prior month and 3.10% for March 2006. The “prime” 60-plus day delinquency index for March was 2.69%, compared to 2.66% in February. Fitch also reported that “sub-prime” 60+ day late payments decreased by eight basis points in March to 5.27%. “Sub-Prime” charge-offs also decreased 80 bps to 8.73%. Fitch says the recent decreases in sub-prime charge-offs can be attributed to the normalization of the delinquency bubble caused by changes made to the minimum payment calculation per OCC guidance.
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ABS PRIME CHARGE-OFFS HISTORICAL
Mar 06: 3.10%
Apr 06: 3.19%
May 06: 3.58%
Jun 06: 3.58%
Jul 06: 3.44%
Aug 06: 3.94%
Sep 06: 3.88%
Oct 06: 3.78%
Nov 06: 3.88%
Dec 06: 4.21%
Jan 07: 4.31%
Feb 07: 4.13%
Mar 07: 4.36%
Source: FitchRatings
