DriveTime is back with its second subprime auto loan securitization of the year, according to a presale report published by Standard & Poor’s.

The $288 million DT Auto Trust 2014-2 is backed by a larger percentage of loans with original terms greater than 60 months, 85.6% of the loan pool, compared with 82.3% in the issuer’s previous deal, series 2014-1, which was completed in January. 

The percentage of remaining terms greater than 60 months has also increased, to 75.1% in the series 2014-2 deal from 63.1%.

However S&P stated in its report that DriveTime's long-term loans have generally performed better its short-term loans because of the tighter underwriting criteria. “Long-term loans are primarily originated in the higher-credit grades, except for repeat customers,” explained S&P.  

Deutsche Bank Securities, Wells Fargo Securities, and RBS are the lead underwriters on the latest deal.

S&P has assigned a preliminary ‘AAA’ rating to a $140.43 million class of notes with credit enhancement of 66.1%; to be issued by the trust; a $37.5 million class with credit enhancement of 60.8% is rated ‘AA’; a $54.3 million class with credit enhancement of 51% is rated ‘A’ and a $56.2 million class with credit enhancement of 41.5% is rated ‘BBB.’

The series 2014-2 pool is comprised by approximately $375.02 million in auto loans originated by DriveTime.

S&P noted some slight deterioration in loan composition between this deal and series 2014-1. For example, only 62.53% of loans are in the top three credit grades (DriveTime's best credits); by comparison 65.96% of the series 2014-1 pool was comprised of these credits.

However, the percentage of loan balances associated with an obligor whose FICO is greater than or equal to 600 increased to 15.08% from 14.85% in the series 2014-1 pool.  

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.