Revenue from subprime auto loans will provide collateral for $183.4 million in asset-backed securities coming to market from the Prestige Auto Receivables Trust.
The series 2025-1 notes will be sold to investors through seven tranches of notes, classes A through E, according to rating agencies S&P Global Ratings and Morningstar | DBRS. The notes are all fixed. Classes A1 and A2, the senior notes, have legal final maturity dates of April 15, 2026 and Dec. 15, 2027, S&P said.
Subordinate notes in classes B, C, D and E have legal final maturity dates of Nov. 15, 2028, Feb. 15, 2030, July 15, 2031 and Aug. 16, 2032, S&P said.
DBRS says the deal will close on April 29.
The Rule 144A deal has several structural changes from the 2024-2 transaction, S&P said. Classes A, B, C, D and E benefit from total enhancement amounting to 61.0%, 51.1%, 34.5%, 23.0% and 14.7%, respectively. That compares with 57.5%, 40.6%, 26.6%, 11.6% and 6.0%, respectively. Subordination, a reserve account, overcollateralization and subordination, compose the deal's credit enhancements, S&P said.
Initial overcollateralization is 13.7%, an increase from 5.0%, while target overcollateralization increased to 24.0% of the current collateral, in addition to 3.5% the initial collateral pool balance, plus the aggregate principal balance of all subsequent receivables purchased as of their cutoff date.
Also, S&P said, pre-pricing excess spread is estimated to be 12.2% for the current deal, which is lower than the 15.8% level seen on the PART 2024-2 transaction.
The collateral saw some changes, too. Open bankruptcy collateral represented 29.1% of the collateral pool, up from 25.6%, on the PART 2024-2. On a weighted average (WA) basis, the pool's credit score is 539, down slightly from 546.
The pool's APR decreased to 21.9%, from 24.4%, and that was not the only decrease from the PART 2024-2 deal. The pool's WA loan-to-value decreased to 124.7%, the payment-to-income dropped to 10.6%, and its debt-to-income ratio was 36.7%, which were drops from 127.6%, 10.9% and 37.1%, respectively.
S&P assigned ratings of A1+ and AAA to the A1 and A2 notes, respectively; and AA, A, BBB and BB- to classes B, C, D and E, respectively. DBRS assigns R1 and AAA to the A1 and A2 notes; AA and A to classes B and C; and BBB to classes D and E.
