The weakest consumers are increasingly struggling, and debt investors are starting to take notice.
While many asset-backed securities tied to subprime auto lending are relatively steady, risk premiums have surged in some of the lowest-rated bonds over the last three months, widening by 0.75 percentage point over Treasuries, according to JPMorgan Chase & Co.
The market’s growing trepidation comes as 30-day delinquencies on subprime auto loans have shot up about 3 percentage points since March to around 11.5%, the highest level in