Bank of the West, Santander Launch Combined $1.5B-Plus of Auto ABS

Two auto loan securitizations, from Bank of the West and Santander, launched Friday.

Bank of the West, a subsidiary of France's largest bank BNP Paribas, is in the market with a $739.125 million deal backed by prime loans, its second ever. BNP Paribas is the lead underwriter.

The collateral backing BWSTA 2015-1 series 2015-1 is similar to that of the previous deal, completed in November, according to Standard & Poor’s.  The weighted average FICO is 774 versus 777, with the percentage of FICO scores equal to or over 800 at 37.6% compared with 38.5%.

The percentage of loans with longer terms, between 73 and 84 months, has increased slightly to 37.6% of the pool from 34.4% for series 2014-1. Longer-term loans are generally considered to be riskier, because they amortize more slowly, leaving the borrower underwater for longer. However, S&P said that this risk is “somewhat mitigated” as the bank has originated contracts at this term for over 15 years and has performance data broken out by FICO and loan-to-value ratio going back to 2007.

“In addition, the weighted average FICO on the 73-84-month loans was 766 (771 for 2014-1) at origination and had a significantly higher percentage of new vehicles than the average of the overall pool,” the presale report states.

Unlike the November deal, which issued fixed-rate paper exclusively, the trust will offer up to $125 million of the AAA-rated, class A-2 notes, or half of the total tranche, as floating rate.  These notes have a final maturity of April 2018. There are two other AAA-rated tranches, one for $175 million with a final maturity in October 2019 and another for $81.15 million with a final maturity of September 2020.

In a January interview with ASR’s sister publication American Banker, Paul Wible, national finance group head, said the bank plans more than one auto loan securitization this year. He said Bank of the West may also securitize marine and RV loans in order to open up its balance sheet to fast-growing commercial clients looking to tap credit lines. The bank's RV and marine portfolio is larger than its auto book, according to Wible.

Santader’s latest offering is from its new deep subprime auto loan program. The $809.43 million Drive Auto Receivables Trust 2015-B is backed by loans with a weighted average FICO of 550, in line with 552 in the previous deal, according to S&P. And 17.8% of loans are to borrowers have no FICO score, up from 15.07% in the previous deal.

The percentage of loans to purchase used vehicles 61-72 (73.94%) is similar, as are the percentage of loans with terms of (84.86%); the percentage with terms of 73-75 months decreased slightly, to 5.01% from 5.51%.

Overall, S&P maintains the same expected cumulative net loss range as for the 2015-A deal, at 27%-28%.

Accordingly, the senior class A notes benefit from the same initial hard credit enhancement of 66.50%.

Wells Fargo Securities is the lead underwriter.

The latest offerings come after three auto loan securitizations priced earlier in the week, all of them upsized. Exeter priced a $550 million subprime auto loan deal, EART 2015-2 after launching with $450 million; Honda upsized a prime auto loan deal, HAROT 2015-2, to $1 billion from $750 million; and  Ally Financial upsized a nonprime auto loan securitization, CARAT 2015-2, by $200 million to $1.26 billion.