Santander Consumer USA has priced its second Chrysler Capital-related securitization of 2018 in a $1.48 billion bond sale backed by prime and near-prime auto loan receivables, according to ratings agency reports.
Santander Prime Auto Issuance Notes 2018-A included a Class A $1.16 billion tranche with a coupon of 0.1%, issued with final triple-A ratings from S&P Global Ratings and DBRS. The notes are supported by initial credit enhancement of 21.85%.
Five subordinate tranches were also marketed through the trust totaling $318.9 million.
The deal marked the fourth asset-backed transaction of prime and near-prime loans issued through Santander’s Chrysler Capital division. Chrysler Capital was formed in 2013 under Santander’s preferred-lender partnership with Chrysler Group LLP to underwrite and service indirect loans for Fiat Chrysler Automobiles dealers.
Chrysler Capital has originated $45.2 billion in retail loans and $23.6 billion in leases over the past five years, according to a new-issue report from DBRS.
The collateral pool of 50,050 loans has a prime-level weighted average FICO of 738, even though 42.3% of the pool included borrowers with FICOs under 700 (the minimum FICO was 630).
The Fiat Chrysler autos, trucks and SUVS financed through Chrysler Capital have an average loan size of $29,476 – the highest among Santander’s four Chrysler-related loan securitizations – with an average APR of 6.45%.
The loans are recent vintage, all originated since the third quarter with a weighted-average seasoning of less than two months. Most of the loans were also for new vehicles (87%) with 68 months remaining. More than 78% had extended terms beyond 60 months, according to DBRS, with 4.37% of the loans holding extended terms between 76 and 84 months.
The 2018-A deal also has a weighted-average loan-to-value ratio of 98.2%, a payment-to-income ratio of 8.78% and a debt-to-income ratio of 27.94%.
The loan-backed ABS follows January’s first-ever $872.1 million securitization of prime leases underwritten by Chrysler Capital.
Last month, Santander Consumer USA packaged $1.1 billion in subprime auto receivables through its Drive Auto Receivables Trust platform involving independent and multiple-franchise dealers, as well as direct consumer loans.
S&P has an expected loss scenario of 4.75%; DBRS project 4.5% in net losses.