July 14, 2024

CarMax Auto Finance launches its first nonprime securities offering

CarMax Auto Finance launched its inaugural nonprime auto asset-backed securitization deal on June 18, following a trend of subprime issuances dominating total auto ABS volume in May. The $625 million ABS transaction was issued by CarMax Auto Finance (CAF), as reported by Finsight, a securities monitoring firm. CAF has entered the market with…


1. What is an asset-backed securitization?

An asset-backed securitization is a type of financial instrument where pooled assets are used as collateral to back the securities being issued.

2. What is the difference between nonprime and subprime auto ABS transactions?

Nonprime auto ABS transactions involve loans to borrowers with slightly better credit profiles compared to subprime borrowers, who have lower credit scores and may have a higher likelihood of default.


CarMax Auto Finance’s move into the nonprime auto ABS market demonstrates the company’s strategic expansion and diversification in the securitization space. With the success of this transaction, CAF is poised to further establish its presence in the asset-backed securities market.

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