Byrider Finance on Friday closed on the first of three subprime auto ABS deals that have entered the April pipeline.
Byrider, which finances used vehicles on a “buy here, pay here” basis at its 142 company-owned and franchised lots across the country, priced $126.2 million in securities through its CarNow Auto Receivables Trust 2021-1 vehicle, backed by a pool of subprime auto loans underwritten to borrowers with a weighted average FICO of 556.
Also launching deals last week were Santander Consumer USA and DriveTime Automotive Group.
In Byrider’s CarNow transaction, the pool’s high-leverage loans (159.5% weighted-average loan-to-value) carry current loan balances of $11,073 after nine months of seasoning, on 54-month original terms. The WA coupon is 21.12%. All of the loans are underwritten serviced by Byrider Finance.
Kroll Bond Rating Agency assigned AA ratings to the senior $78.9 million Class A tranche due October 2024, which is supported by 46% credit enhancement (slightly lower than the prior deal by Byrider, which is owned by Altamont Capital Partners). The Class A notes priced at a fixed-rate coupon of 0.97%.
In Santander’s Drive Auto Receivables Trust 2021-1, the lender is sponsoring a $1.25 billion securities offering of its deeper subprime assets of its riskier low- or non-FICO loans. The deal could potentially be upsized to $1.56 billion, according to presale reports from S&P Global Ratings and Moody’s Investors Service.
The 75,790 retail installment contract loans in the deal were either acquired or originated by Santander. The weighted average non-zero FICO for the deal is 582, with borrowers paying an average of 19.01% APR on the contracts. The loans with original terms of 71 months are seasoned an average of five months.
About 72% of the contracts are for used vehicles.
Moody’s expected cumulative net loss on the deal is 23.5%, while S&P has an expected CNL range of 22.5%-23.5% for the 15thissuance from Santander’s Drive platform.
Each agency has assigned triple-A ratings to the senior portion of the capital stack.
The $435 million DT Auto Owner Trust 2021-2 is the second deal sponsored this year by DriveTime, and the 69thoverall since the used-vehicle retailer began securitizing its originations in 1996.
The deal includes five classes of notes, including a $235 million Class A tranche with preliminary AAA ratings from Kroll and S&P. All the notes will be backed by a pool of approximately $500 million in subprime auto loans that have average APRs of 22.51% on loans with average remaining principal balances of $16,991. The WA original terms were 68 months, with three months of seasoning.
The transaction includes a three-month prefunding period in which DriveTime is expected to add $100 million of pool-eligible loans to the deal after closing.
Kroll has an expected base-case loss range of 27.5%-29.5%; S&P’s expected loss is 27.75%-28.75%.
