Frankfurt, December 08, 2009 -- The performance of the auto loan asset-backed securities (ABS) market in Europe, the Middle East and Africa (EMEA) remained overall stable in October, according to the latest indices published by Moody's Investors Service. The cumulative loss trend increased to 0.7% from 0.6% one month previously, while the 60 days plus delinquency trend remained at 1.4% in October which constitutes an increase of 0.1% during the past year. In some smaller markets like Portugal, Spain and South Africa increasing default and loss trends continued a rising trend which has already been observed over the past 12 months. Moody's constant prepayment rate (CPR) trend continued its slightly decreasing trend and currently stands at 10.7%.

"The auto loan market in EMEA has proven so far to be resilient to therecession and collateral performance has remained stable" says YuezhenWang, a Moody's Senior Associate. "However, as car scrapping programmes across Europe are coming to an end, a reduction in demand is anticipated, especially for light vehicles which benefited most from these programmes.

With the decline in demand, recovery rates in auto ABS transactions might be negatively affected."The Eurozone as a whole resumed growth in Q3 2009, expanding by 0.4% over the previous quarter. However, the recovery is likely to be slow.

Unemployment is expected to continue to rise into the middle of 2010, due to the lagged response from the labour market. The governments of European countries are also likely to be held back by increasing fiscal deficits. The uncertainty about when fiscal tightening will take place may weigh on consumer confidence. However, on balance, continued accommodative fiscal and monetary policy in the Eurozone is likely to assist the recovery after the deepest recession since the Second World War. Moody's notes that the European Central Bank's gradual withdrawal of enhanced credit support to the Eurozone could impact confidence and this will be closely monitored.

Moody's outlook for German, Portuguese and South African auto loan ABS remains negative (see EMEA ABS, CMBS & RMBS Asset Performance Outlooks, July 2009). Historically, the performance of German Auto ABS has not been particularly sensitive to increases in unemployment and thus only a moderate deterioration in performance is expected in the current economic downturn. Most transactions in Portugal benefit from a high degree of seasoning, which mitigates the pressure despite the economic downturn and steadily increasing losses over the last 12 months. In South Africa, an oversupply of used cars is depressing prices, which might have an adverse impact on recovery values.

As of October 2009, the total outstanding pool balance in the EMEA auto loan ABS market accounted for EUR22.6 billion which constitutes a decline of 10% over the past year. Approximately 75% of the outstanding transaction volume in this market is collateralised by auto loans that are originated by captive originators. The most important market for auto loan ABS in EMEA is Germany, which represents almost 60% of the outstanding volume, followed by France and Italy with each accounting for approximately 13% and less representative markets such as Spain, CIS, Portugal, South Africa and the UK.

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Editor's Notes
Moody's monthly indices are published mid-month and can be found on www.moodys.com in the Structured Finance sub-directory under the Research & Ratings tab, under the Structured Indices sub-category of

Industry/Sector Research.

http://v2.moodys.com/moodys/cust/research/MDCdocs/08/2007400000663221.xls?f
rameOfRef=structured

In addition, Moody's publishes a weekly summary of structured financecredit, ratings and methodologies, available to all registered users of our website, at www.moodys.com/SFQuickCheck.Paris

Carole Gintz
VP - Senior Credit Officer
Structured Finance Group
Moody's France S.A.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Frankfurt
Yuezhen Wang
Senior Associate
Structured Finance Group
Moody's Deutschland GmbH
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

© Press Release 2009