Prestige Auto Receivables Trust is returning with a $378.2 million securitization deal, secured by a pool retail installment contracts on new and used vehicles.
The platform is no stranger to the securitization industry, and the Prestige Auto Receivables Trust, 2022-1, is the 21st term securitization overall from the program, according to Morningstar | DBRS.
The final receivables pool will be equal to approximately $415.7 million, as of September 30, the cutoff date. The securitization pool balance will exceed the collateral pool's aggregate principal amount of the issued notes, by 9.00%, according to DBRS.
Prestige launched in 1994, and serves subprime borrowers that are currently in bankruptcy. In one notable change for, PART 2022-1, the percentage of bankruptcy collateral decreased to 18.58%, from 44.27% in PART 2021-1, according to a pre-sale report from S&P Global Ratings. Also, new vehicles represent 5.34% of the PART 2022-1 pool, compared with 10.57% in the 2021-1 transaction.
On average, the collateral has an outstanding balance of $20,474, an original loan term of 71 months, and an annual percentage rate of 19.54%—the highest since PART 2016-1. The collateral also has a weighted average (WA) seasoning of 4.7 months, a decrease from 9.6 months.
The loan-to-value ratio held at 127%, compared with PART 2021-1, and which was a dip from the 132%-133% range held from a string of deals since 2016-1, according to DBRS.
Citibank is the bank account provider, indenture trustee and backup servicer on the deal, which is structured as a rule 144a transaction. PART 2022-1 will issue notes to investors through seven classes of notes.
The trust will repay investors through a senior-subordinate structure, on a pro rata basis, to the indenture and owner trustees, and then fees and expenses to the to the servicer, according to DBRS. After that the trust will pay interest to the holders of class A-1, class A-2 and class A-3 notes on a pari passu basis, and then interest to the class B notes. After that, the trust will begin to pay principal on the applicable class A and class B notes. Payments will follow a similar pattern through the rest of the tranches.
PART 2022-1 benefits from several forms of credit enhancement, including subordination, a reserve account that will be funded to at least 1.00% of the initial pool balance, and excess spread equaling 9.36%, according to DBRS.
