PackagingLike many other financial firms, AmeriCredit packages its loans and passes them to off balance sheet trusts that issue bonds that are backed by the loans. In this process, known as securitization, the proceeds from the bond sales go back to AmeriCredit, which uses the money to make more loans and pay debts.
MassagingHowever, the January numbers would appear to undermine AmeriCredit's protestations that it's not massaging its numbers with extensions. In six securitization trusts in which delinquency triggers were within a hair's breadth of being set off, extensions rose by large amounts. The table below shows the trusts and the relevant numbers.
Loan extensions rise while delinquencies remain just below trigger levels
|Loan Trust Name||Extension rateDecember 2001||Extension rateJanuary 2002||Av. Delinquencies*January 2002||DelinquencyTrigger**|
|Source: Detox. |
*Three-month average calculated from November to January delinquency numbers.
**Triggers are based on three-month average numbers