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National Credit Default Rates Increased in October 2012 According to the S&P/Experian Consumer Credit Default Indices
Chicago and Los Angeles Default Rates Hit New Recent Lows
By: PR Newswire
Nov. 20, 2012 09:57 AM
NEW YORK, Nov. 20, 2012 /PRNewswire/ -- Data through October 2012, released today by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed that most loan types saw an increase in default rates during the month. After nine consecutive months of declining default rates, the national composite increased to 1.55% in October from 1.46% September rate. The first mortgage default rate increased from 1.36% in September to 1.47% in October. Auto loan and second mortgage default rates moved up from 1.11% and 0.64% in September to 1.14% and 0.65% in October, respectively. Bank card default rate posted the lowest post-recession rate of 3.68% in October; it was 3.70% in September.
"After three quarters of declining consumer credit default rates, national composite increased in October," says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. "Overall consumer credit quality remains healthy. Looking across our 10 headline indices, all are at levels typical of the pre-crisis period of the early 2000s. Only one – bank card – shows default rate above 2.5% and even that hit the recent low, which is close to its eight-year historic minimum."
"The national composite posted 1.55% in October, 9 basis points above the previous month's rate. This change was mostly driven by an increase in the first mortgage default rate, which posted 1.47% in October, 11 basis points above September's level. The auto loan rate is 3 basis points up from September; it posted 1.14% this month. The second mortgage is marginally up by 1 basis point from its September rate of 0.64%, the lowest rate in its eight-plus year history. Bank card was the only product line that decreased in October. It hit the new post-recession low of 3.68%, down by 2 basis points from the previous month.
"Three out of five cities we cover showed a decrease in their default rates; and two of them hit the post-recession lows – Chicago and Los Angeles. Chicago's rate was 1.78% in October, down from 1.82% in September. Los Angeles saw a third consecutive monthly decrease, marginally down to 1.44% in October, from September rate of 1.45%. Miami's rate fell to 2.44% in October from 2.48% in September. New York's October rate was 1.35%, 7 basis points up from September. Dallas's rate increased the most – its 1.26% October rate was up by 23 basis points from September's rate; and it still remains the lowest default rate of the five cities we publish."
The table on the next page summarizes the October 2012 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.
The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:
About S&P Dow Jones Indices
S&P Dow Jones Indices LLC, a subsidiary of The McGraw-Hill Companies is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial AverageSM, S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of institutional and retail investors. More assets are invested in products based upon our indices than any other provider in the world. With over 830,000 indices covering a wide range of assets classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com.
It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, and their respective affiliates, parents, subsidiaries, directors, officers, shareholders, employees and agents (collectively "S&P Dow Jones Indices") does not sponsor, endorse, sell, or promote any investment fund or other vehicle that is offered by third parties and that seeks to provide an investment return based on the returns of any S&P Dow Jones Indices index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices or its affiliates do not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.
STANDARD & POOR'S and S&P are registered trademarks of Standard & Poor's Financial Services LLC. "Dow Jones" is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones").
Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2011 was $4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil.
For more information, visit http://www.experianplc.com.
Experian and the Experian marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.
Jointly developed by S&P Indices and Experian, the S&P/Experian Consumer Credit Default Indices are published on the third Tuesday of each month at 9:00 am ET. They are constructed to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien. The Indices are calculated based on data extracted from Experian's consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month. Experian's base of data contributors includes leading banks and mortgage companies, and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
For more information, please visit: www.consumercreditindices.standardandpoors.com.
This document does not constitute an offer of services in jurisdictions where S&P Indices or its affiliates do not have the necessary licenses. S&P Indices receives compensation in connection with licensing its indices to third parties.
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SOURCE S&P Dow Jones Indices
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