Between the three transactions $1.7 billion of subprime auto loan paper hit the market this week.
Exeter's deal, Exeter Automobile Receivables Trust 2015-3, is the sponsor's third transaction so far this year.
Standard & Poor's assigned preliminary ratings of 'AA' to the class A notes, which have a legal final maturity date of March 16, 2020; 'A' rating to the class B notes due Aug. 16, 2021; 'BBB' rating to the class C notes due Aug. 16, 2021; and 'BB' rating to the class D notes due Oct. 17, 2022.
The sponsor increased credit enhancement on the class A through C notes relative to the 2015-2 transaction issued in May: it rose to 34.25% from 33% for the class A notes; to 21% from 19.8% for the class B notes; and to 11% from 9.55% for the class C notes.
The increases offsets a decline in the initial overcollateralization of the pool, which decreased to 3.50% from 4.00%, according to S&P.
Among other differences from the 2015-2 deal, there is a higher percentage of loans to borrowers with no FICO score to 6.64% of the pool from 3.71%. But that increase is partly offset by an increase in loans with FICOs higher than 600, to 23.38% of the pool from 21.38%; and a decrease of loans with a FICO of less than 540 to 24.49% from 25.83%.
Citigroup and Wells Fargo Securities are the lead managers.
Exeter, which is headquartered in Irving, Texas, is majority owned by the Blackstone Group and originates auto loans indirectly through franchised and independent dealerships.
S&P states in its presale report that the issuer has experienced rapid growth over the last two years, at the cost of performance.
The managed portfolio was $3.134 billion at the end of the second quarter, an increase of approximately 29% from $2.422 billion a year earlier. "Although the growth is slower than in the past, we have been concerned that its growth may have come at the expense of credit quality and inadequate infrastructure," said S&P.
Access to liquidity remains strong, since Blackstone continues to fund the company: it provided $50 million in additional capital to the company, bringing its total capital contribution in Exeter to approximately $440 million as of Dec. 31, 2014. The sponsor also has a multi-year line of credit provided by Wells Fargo, Deutsche Bank, Citibank, Goldman Sachs and Barclays totaling $1.65 billion.