Tractor loan portfolios across originators continue to show heightened stress with no improvement in 90+dpd delinquency for 2014 and 2015 vintages unlike commercial vehicle loans where the stress has subsided for recent vintages. While the agency maintains a negative outlook on tractor loans, the ratings of the current transactions may not be impacted due to a higher level of amortisations and credit enhancement build-up. 2015 vintage securitised tractor loans have performed better than 2014 vintage with the former's WA 90+dpd delinquencies dropping sharply to 4.73% compared to 9.37% for 2014 vintage at 11 months seasoning, which the agency considers to be an isolated instance at variance with the portfolio performance.
The stress in construction equipment loans remains elevated with little signs of recovery even after significant seasoning. The plateau observed in 90+dpd delinquency indicates that CE borrowers continue to face stress and are unable to repay loans after missing payments on over three instalments. As of 4Q16, the 180+dpd delinquency increased by 263bp to 3.90% in the 12 months ended March 2016, showing no reversal of loans to lower delinquency buckets.
A stable performance was observed in Ind-Ra rated mortgage loans owing to steady delinquency rates and high prepayment and amortisation levels.
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