Santander Consumer USA is concentrating a higher proportion of long-term leases in its first auto-lease securitization of Chrysler, Jeep and Dodge-branded vehicles for 2021.
According to a presale report from Fitch Ratings, Santander – the consumer lending arm of Santander Holdings USA (rated BBB+ by Fitch) – has a 53.9% share of leases with original terms greater than 36 months in the planned $1.25 billion asset-backed transaction.
That share exceeds to 50.2% for Santander’s $1.24 billion lease ABS transaction last October, and is the “highest concentration to date” on the ABS shelf, according to Fitch.
Santander Retail Auto Lease Trust 2021-A is the 8thretail auto-lease securitization by Santander since 2017, and will include seven classes of notes that will be backed by an exchange note collateralized by a $1.35 billion reference pool of closed-end leases that Santander originated through its Chrysler Capital division.
The deal could be potentially upsized to a $1.6 billion bond offering, according to the ratings agency.
Santander serves as the U.S. captive finance arm for dealers of the former Fiat Chrysler Automobile Co., which merged with European automaker Group PSA to form Stellantis in January.
The 42,374 leases in the reference pool have an average securitization value of $31,891 per vehicle, with weighted average original terms of 39 months and seasoning of seven months. Crossover and sport-utility vehicles make up approximately 69.9% of the leased vehicles, with a model concentration led by the Jeep Grand Cherokee (21.9%) and the Dodge Ram 1500 pickup truck (18.2%).
Fitch assigned preliminary AAA ratings to three classes of term notes: a $455.4 million Class A-2 tranche (or $583.2 million, if the deal is upsized), a $405.4 million (or $519 million) Class A-3 tranche and a $113.5 million (or $145.14 million) Class A-4 tranche. Fitch also assigned its highest short-term rating of F1+ to a one-year money-market tranche totaling $100 million, or $128 million if upsized.
Wells Fargo is the underwriter.
