In the previous three years, DriveTime has not exceeded three auto loan securitizations in one calendar year.
With three months remaining in 2016, the subprime auto lender is already on deal No. 4.
The DT Auto Owner Trust 2016-4 is a $438.51 million portfolio of five classes of notes, backed by $543.04 million in subprime auto loans originated by DriveTime Car Sales Co. The latest transaction is DriveTime’s 57th securitization in 20 years.
Bond rating agency DBRS assigned a provisional ‘AAA’ structured finance rating to the $194.14 million stack of Class A notes , according to a presale report issued Friday. Also receiving ratings were the four subordinate note classes: an ‘AA’ to the $63.8 million in Class B notes; ‘A’ to the Class C notes sized at $76.03 million; ‘BBB’ to $66.52 million in Class D notes; and ‘BB’ to $38.02 million in Class E notes.
The deal is similar in structure to most of DT Auto Owner Trust’s recent transactions dating to 2013: an average loan balance of $17,474 over 65 months, taken out by borrowers with a weighted-average FICO score of 542 and a 20.47% APR.
The company is, however, issuing fewer loans in excess of 60 months: the 47.64% of loans in the pool with terms between 67 and 72 months is less than seven of the previous eight DT transactions.
The initial credit enhancement in the 2016-4 transaction is expected to be 19.25% of the pool balance, including a 1.5% reserve account of the initial pool balance. That will be built to a target of 23.65%, according to DBRS’ presale report.
The transaction is expected to close Oct. 6.