Routine asset-backed securities issuer DriveTime Car Sales is coming to market again with a $450 million transaction backed by its installment sales contracts on used cars to subprime borrowers.
The deal is the issuer's second for the year, and will issue notes from a pro rata, sequential pay structure, where interest and principal will be paid on senior notes in full before payments begin on the next junior class of notes, according to a pre-sale report from Morningstar | DBRS.
Bridgecrest Acceptance Corp. is sponsor, transferor and servicer on the deal, which is expected to close on April 26, according to the rating agency.
DT Auto Owner Trust 2023-2 has credit support of 60.6%, 54.2%, 44.1%, 35.4% and 32.1% on the A, B, C, D and E classes, respectively, according to S&P Global Ratings, which also expects to assign ratings to the notes. The credit support levels confer coverage of 2.37x, 2.12x, 1.72x, 1.38x and 1.25x to the A, B, C, D, and E, respectively, of S&P's 25.5% expected cumulative net losses on those notes.
All of the notes are fixed. The most senior class has a legal final maturity date of April 15, 2027; classes B ,C and D have a legal final maturity of Feb. 15, 2029; and the class E notes are expected to mature on April 15, 2030, says S&P.
Aside from subordination the notes get credit enhancement from overcollateralization of 12.60%, of the initial pool balance. This could build to a target of 18.80% of the outstanding balance based on excess spread—another form of enhancement—in the deal.
The non-declining reserve account is 1.50% of the initial pool balance, and the deal will fund that at the deal's inception, DBRS said.
DBRS and S&P's ratings seem identical on all the notes. They expect to assign ratings of 'AAA' on the $240.4 million, class A notes; 'AA' on the $51.2 million, class B notes; 'A' on the $56.8 million, class C notes; and 'BBB' and 'BB' on classes D and E, respectively.
