Delinquency rates were up month-over-month (MoM) in both KBRA’s Small-Medium Ticket and Large Ticket sub-indices, each contributing to a 14-basis point (bp) rise in our headline index to 1.17%. Meanwhile, annualized net loss rates moved in opposite directions, rising in our Small-Medium Ticket Sub-Index, but declining in the Large Ticket Sub-Index. As a result, net losses moved 26 bps lower to 0.76% in the headline index. Current index values as well as MoM and year-over-year (YoY) changes are presented in the table below.
The notable decline in Large Ticket annualized net losses was mostly driven by lower defaults and higher recoveries in the same three transactions that drove most of the rise in net losses in our April index reading. Defaults and recoveries in these transactions, which feature concentrations in trucking collateral and constitute only 4% of our Large Ticket Sub-Index, have been volatile, largely due to stress in the transportation industry.
To maximize liquidation…