Exeter Finance Corp joins the growing list of subprime lenders to the tap the securitization market, offering $550 million of bonds backed by the asset class, according to DBRS.
Exeter, which is headquartered in Irving, Texas, is majority owned by the Blackstone Group and originates auto loans indirectly through franchised and independent dealerships.
Its latest deal, called Exeter Automobile Receivables Trust 2015-1 , will issue $32 million of class A notes, due June 2019, and rated 'AAA'; $71 million of class B notes due March 2020, and rated 'A’, $59 million of class C notes due December 2020 and rated BBB’; and $49 million of class D notes due December 2021 and rated BB’.
Credit enhancement for the class A notes is 40.50%, the class B notes have 27.00%;the class C notes 15.80%; and the class D notes 6.50%.
Exeter uses a proprietary credit scoring model. In early 2014, Exeter it enhanced the model to include third-party data feeds, according to DBRS. The data feeds include detailed demographic information such as time at residence, tax roll information, time at employer, payday lending historical performance data and history of payments related to student loans, as applicable. Exeter's proprietary model currently declines approximately 50% of submitted applications.
EART 2015-1 is backed by loans with a weighted average FICO of 567 and an Exeter score of 230, in line with the issuer’s previous transactions. Level of debt in the current deal are up from the previous deal, 2014-3, as evidenced by the average loan-to-value ratio of 113.3% compared to 111.2%.
Last week over $1.8 billion of subprime auto loan ABSs priced.