Santander Consumer USA is marketing $752.2 million of securities backed by subprime auto loans via Drive Auto Receivables Trust 2016-A, according to Standard & Poor’s.
J.P. Morgan Securities is the lead underwriter.
On offer are $85 million of money market notes rated ‘A-1+’; $145 million of ‘AAA’ rated notes due March 15, 2018; and $120 million of ‘AAA’ rated notes due May 15, 2019. All of these notes benefit from credit enhancement of 41.7%.
At the subordinate level, the trust will issue $132 million of ‘AA’ rated notes due May 15, 2020 with 28% credit enhancement; $151.9 million of ‘A’ rated notes due May 17, 2021 with 12.25% credit enhancement; and $118.5 million of ‘BBB’ rated notes due May 15, 2023.
Santander Consumer established the DRIVE platform in 2013 to securitize auto loans that were too risky to be used as collateral for its other platforms. DRIVE 2016-A is the fifth transaction to be issued from the platform.
The collateral pool’s credit quality is similar to that of DRIVE 2015-D, and has the same expected cumulative loss range at 27%-28%, according to S&P. Loans have weighted average two months seasoning and a weighted average original term of 70 months. The weighted average FICO of borrowers in the pool is 550, slightly higher than the WA FICO of 547 for the 2015-D pool.