Revenue from a pool of 10,080 subprime auto loan contracts on cars and sport utility vehicles will secure $224.3 million in securitization bonds, ready for sale to investors through the latest Prestige Auto Receivables Trust.
The series 2024-1's capital structure features higher subordination levels on the class A, B and C notes, which reached 52.1%, 37.6% and 24.1%, respectively, a change from 49.4%, 34.9% and 23.6%, on the A, B and C notes on the Prestige Auto Receivables Trust, 2023-2, according to S&P Global Ratings. At class D notes saw a drop in
PART 2024-1 will issue class A, B, C, D and E notes through six tranches, according to S&P analysts, and issue only fixed rate notes. It features two tranches of class A notes, which are senior in repayment priority to the classes B through E notes, S&P said.
Prestige's two tranches of class A notes benefit from 59.90% in total credit enhancements, while classes B, C, D and E have 51.88%, 42.54%, 33.23%, and 26.96% in enhancement, S&P said. Those credit support levels provide enough coverage of the rating agency's expected cumulative net loss (ECNL) level of 19.25% for classes A through E.
S&P said the pool's distribution of vehicle types is divided between cars, SUVs and vans or trucks, with SUVs taking up more of the share of vehicles in the asset pool over time since the 2021-1 deal. Cars reached their highest concentration of the pool since that transaction on the 2022-1 deal, with 58.0%, but in the current deal they've dropped to 48.6%, with SUVs making up 44.9%. Also, used cars compose almost the entire pool, with a concentration of 96.7%, the rating agency said.
On a weighted average (WA) obligors in the pool have a non-zero credit score of 550, and their loans carry annual percentage rates of 23.4%. The loans have a WA original term of 70 months, with a 68-month remaining term, S&P said.
Prestige Financial Services is the deal's sponsor, assets contributor, custodian and servicer according to the rating agency.
S&P assigns ratings of A1+ and AAA to the A1 and A2 tranches; AA and A to the B and C tranches; and BBB and BB- to the D and E tranches.
