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S&P/Experian Indices Show Decline in Consumer Defaults

 

Auto Default Index Experiences Biggest Decline This Month

ExperianNew York, NY – Data through December 2010, released today by Standard & Poor’s and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed a decline in monthly default rates for first and second mortgages to 2.93% and 1.74% respectively. Auto loans experienced the biggest decline this month to 1.68% from 1.76% in November. The bank card index declined slightly to 6.73% default rate.

“Default rates across the four major categories of consumer borrowing declined in December from November and from a year earlier.  Nationally, consumers continue to gradually improve their financial condition,” commented David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P. “Separately, data from the Federal Reserve shows that bank card credit declined through November. Debt-service ratios, the proportion of disposable income that goes to paying debt, continues to decline. On a regional basis, the five cities we cover suggest that the Sunbelt continues to see greater than typical default rates.”

Consumer credit defaults varied across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas reported each month in this release Los Angeles and Chicago experienced a decrease in defaults this month to 3.07% and 3.13% respectively. Dallas was the only one that had increased in default rates to 2.21%. Miami and New York declined slightly to 10.15% and 3.01% respectively.

The table gives summary results for December 2010 for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.

 

S&P/Experian Consumer Credit Default
Indices National Indices 

 

Index

December
Index Level

Change from November 2010

Change from
December 2009

 

Composite

3.01

-3.94%

-37.01%

 

First Mortgage

2.93

-4.34%

-38.57%

 

Second Mortgage

1.74

-3.07%

-50.76%

 

Bank Card

6.73

-1.77%

-17.68%

 

Auto Loans

1.68

-4.45%

-36.85%

 

Source: S&P/Experian Consumer Credit Default Indices

Data Through: December 2010

 

 
       

The second table provides the S&P/Experian Consumer Default Composite Indices for five selected metropolitan statistical areas:

 

Metropolitan Statistical Area

December
Index Level

Change from November 2010

Change from
December 2009

 

New York

3.01

-0.99%

-31.03%

 

Chicago

3.13

-6.13%

-39.87%

 

Dallas

2.21

0.37%

-35.38%

 

Los Angeles

3.07

-5.82%

-51.69%

 

Miami

10.15

-1.13%

-26.02%

 

Source: S&P/Experian Consumer Credit Default Indices

Data Through: December 2010

 

 
       

Jointly developed by Standard & Poor’s and Experian, the S&P/Experian Consumer Credit Default Indices are published on the third Tuesday of each month at 9:00am 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.

About S&P Indices

S&P Indices, a part of McGraw-Hill Financial, is the world’s leading index provider maintaining a wide variety of investable and benchmark indices. Over $1.25 trillion is directly indexed to Standard & Poor’s family of indices, which includes the S&P 500, the world’s most followed stock market index, the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, the S&P Global BMI, an index with approximately 11,000 constituents, the S&P GSCI, the industry’s most closely watched commodities index, and the S&P National AMT-Free Municipal Bond Index, the premier investable index for U.S. municipal bonds. For more information, please visit www.standardandpoors.com/indices

Standard & Poor’s does not sponsor, endorse, sell or promote any S&P index-based investment product. The S&P/Experian Consumer Credit Default Indices are products of S&P Indices, which operates independently of Standard & Poor’s Ratings Group. Standard & Poor’s Ratings Group plays no role in the compilation, distribution or licensing of the Indices.

About Experian Capital Markets

Formed as a response to market needs, Experian Capital Markets leverages Experian’s comprehensive U.S. consumer and business databases to provide data and analytics to serve the transparency needs of the structured finance market participants. By taking underlying borrower data and applying advanced analytics, Experian provides insight into U.S. consumer and business credit behavior across all obligations, helping to forecast future payment patterns on prepayments, delinquencies, charge-offs or defaults for non-agency residential mortgage–backed securities and other asset-backed securities.

About Experian

Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 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 March 31st, 2010, was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and Sao Paulo, Brazil.


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