Exeter Finance returned to sponsor another securitization of revenue from non-prime auto loans, raising $869.8 million through the Exeter Automobile Receivables Trust, 2024-3.
The current transaction will sell the most in securitized bonds since the 2022-1 series came to market, according to Asset Securitization Report's deal database. Deutsche Bank Securities, J.P.Morgan Securities and Mizuho Securities are lead underwriters on the deal, according to Moody's Investors Service. The transaction will sell class A, B, C, D and E notes through seven tranches.
EART 2024-3 benefits from total initial hard credit enhancement amounting to 57.75% on the A1 through A3 notes; 46.15% on the class B notes; 32.25% on the C tranche; 17.35% on the D tranche; and 7.25% on the class E notes. The notes have 6.25% in initial overcollateralization, which will build as the notes amortize to a target level of 15.25%. There is also a reserve fund of 1.00% of the pool balance, according to Fitch ratings analysts.
At the Aaa stress level, Moody's said it expects a cumulative net loss (CNL) of 54%, and 21% on the EART 2024-3 pool.
The rating agency counts Exeter's role as sponsor and servicer a double-edged sword on the deal. Its experience is a credit positive, with its serviced portfolio of $10.1 billion of non-prime auto loans as of March 31, 2024.
The pool consists of 44,654 loans, that have a FICO score of 570, and a loan-to-value ratio of 114% on a weighted average (WA) basis. Used cars made up almost the entire pool, 97%, which had a WA original term of 73 months, Fitch said. The rating agency also noted that the loans have a remaining size of $19,479, on average.
Moody's assigns ratings of P1 to the A1 notes; Aaa to the A2 through B notes; Aa1 to the C tranche and Baa1 to the class D notes.
