Santander Consumer USA priced an upsized, $1 billion offering of bonds backed by subprime auto bonds this week.
The deal, originally marketed at just under $780 million, it the third of the year from the Santander Drive Auto Receivables Trust (SDART) program.
The transaction consists of three senior tranches and four junior tranches; the $169 million class A-1 money market tranche, rated F1+’ and P-1’ by Fitch Ratings and Moody’s Investors Service, yields 0.48%, according to a regulatory filing.
The remaining senior notes are all rated AAA’/ Aaa’ and consist $110 million class A-2-a notes and $205 million A2B notes with a weighted average life of 0.86 year that pay 50 basis points over the Eurodollar synthetic forward curve and 51 basis points over one-month Libor, respectively; and $129.5 imllion of class A3 notes with a WAL of 1.78 year that pay EDSF plus 58 basis points.
The class A notes benefit from initial credit enhancement of 49.85%.
JP Morgan Securities is the lead underwriter on the deal.
Fitch and Moodys cite the stable credit quality of the borrowers in the pool as strength of SDART 2015-3. Borrowers in the pool have a weighted average FICO score of 597, which is higher than both of the previous SDART transactions this year.
The loans backing the securities are 37.8% new vehicles and 62.2% used vehicles.
The WA loan-to-value ratio for the collateral is 110%, with a WA seasoning of 2.75 months. In its presale report, Fitch said “an LTV ratio greater than 100% could expose the trust to higher losses stemming from increased loss severity and potentially weaker recoveries.”
SDART 2015-3 is the company’s 56th transaction since 1998, and both Fitch and Moody’s cite the servicer’s experience as key strength for the deal.
