DriveTime Automotive Group, a specialty auto lender and longtime user of securitization finance, is preparing to issue $598.5 million in asset-backed securities through Bridgecrest Lending Auto Securitization Trust 2023-1, the latter's first transaction this year.
This will be the first deal collateralized by loans that Bridgecrest Acceptance Corp. services. The deal, known as BLAST 2023-1, is slated to close on October 31, according to the Asset Securitization Report's deal database. This is also the trust's first appearance in the list of deals.
BLAST 2023-1 will issue notes through seven tranches of notes, and technically five credit rating classes, according to Kroll Bond Rating Agency. They have legal final maturity dates ranging from Nov. 15, 2024 on the 'K1+', class A1 notes through July 15, 2030, on the 'BB' class E notes, ratings analysts said.
Citigroup Global Markets, Deutsche Bank Securities and Wells Fargo Securities are managers on the deal, according to the database.
For a revenue pool comprised of subprime assets—they have a weighted average FICO score of 556, for one—the notes do manage to get some high ratings. Ratings of 'AAA' go to the A2 and A3 notes; 'AA' to the class B notes; 'A' goes to the class C notes; 'BBB' to the class D notes; and 'BB' to the class E notes.
Other rating agencies have weighed in, too, according to the ASR database. DBRS Morningstar and S&P Global Ratings, for instance, assign 'R-1' and 'A-1+ to the A1 notes. The rating agencies assign virtually identical ratings through the rest of the deal, with 'AAA' on the A2 and A3 notes; 'AA' on the class B notes; 'A' on the class C notes; 'BBB' on the class D notes and 'BB' on the class E notes, according to ASR's database.
All of the notes, except the class E notes, will be benchmarked on the three-month Interpolated Yield Curve, and guidance is expected to range from 35-40 basis points over on the A1 notes to 275-290 bps on the class Ds, according to the database.
The deal has a number of positive aspects, including a sequential note repayment structure with the class A notes taking top priority. Credit enhancements include initial overcollateralization of 14.50%, which will build to a target of 19.00%. There is also a cash reserve account equaling about 1.50% of the initial collateral pool balance. The notes also benefit from excess spread of 11.33%, KBRA said.
In one strong collateral attribute, the underlying loans are geographically diverse, according to KBRA. Texas is the state with the largest share, at 15.1%, followed by Florida and Georgia with 13.8% and 9.4% shares of the pool, respectively.
