Exeter Select Automobile Receivables Trust is preparing to sell $336.7
million in subprime auto loan collateral, its first securitization backed by assets from its Select brand subprime loan product.
The transaction is backed by 13,810 loans, which have an average balance of $24,387, according to S&P Global Ratings, the rating agency assessing the deal.
ESART 2025-1 will sell notes through seven fixed-rate tranches, S&P said. Maturities range from May 15, 2026 through Dec. 15, 2032. The notes will repay investors through a senior-subordinate structure, where the outstanding senior notes are repaid first.
Asset Securitization Report's deal database notes that yields are expected to range from 4.60% on the A1+ rated, A1 notes to 6.22% on the BBB-rated, class D notes. Notes are indexed to the one-month, I-Curve, according to the ASR database.
Exeter's most recent securitization of revenue from auto loans, Exeter Automobile Receivables Trust, 2025-2, was also composed of subprime loans, but saw its yields come in a little tighter. Closing on March 26, its yields on the A1+ tranche priced at around 4.53%, while the notes rated BB- offered investors 7.94%, according to the deal database.
The transaction structure includes several layers of credit enhancement, including initial overcollateralization of the initial collateral pool balance, representing 2.75% of the initial collateral pool balance. Excess spread, which stands at 10.06%, will help OC build to a 6.80% target.
There is also a non-amortizing, fully funded reserve account that will equal 1.00% of the initial collateral pool balance, S&P said.
S&P said it paid closer attention to recent originations in Exeter's static pool, especially beginning in Q1 2024, because this is Exeter's first Subprime auto receivables. The Subprime loans which comprise the entire pool.
S&P assigned A1+ to the A1 notes; AA to the A2 and A3 notes; AA to the class B notes; A to the class C notes; BBB to the class D notes and BB to the class E notes.
