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Santander marketing €850m German consumer-loan ABS

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Banco Santander’s German affiliate is preparing a fifth securitization of consumer loans totaling €850 million (US$997.4 million).

SC Germany Consumer 2017-1 UG is secured by receivables from 85,611 general-purpose consumer loans originated by Santander Consumer Bank AG in Germany, a subsidiary of the Spanish banking giant’s Santander Consumer Finance S.A. (SCF). The loans have an average balance of €9,929 with a weighted average interest rate of 6.17%.

The loans (which had an original aggregate balance of €986.3 million) have been seasoned over 10 months. Most of the loans (79%) are unsecured.

The €712.3 million senior note tranche of fixed-rate notes to be issued are provisionally rated AA by DBRS and are supported by 16.2% credit enhancement. Santander will also include an initial €4.25 million liquidity reserve that will be funded at closing.

DBRS has also assigned an A to the €53.2 million Class B fixed-rate notes, BBB to the €33.6 million Class fixed-rate notes, and a high BB to the €13.1 million Class D floating-rate notes.

The deal will have a €37.8 million residual tranche to be retained by the issuer.

The deal was jointly arranged by UniCredit Bank AG and Banco Santander.

Much of the transaction’s structure is similar to Santander’s previous German consumer-loan securitization last year, which included a short 12-month revolving period.

The loans were pooled from Santander Consumer’s managed portfolio €83.5 billion in personal, auto and direct loans. SFC originated €10.7 billion in loans in 2016.

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Consumer ABS Securitization Europe Germany