Santander Consumer USA plans to issue a $631.95 million securitization backed by prime/nonprime auto loan receivables from its Chrysler Capital Auto Receivables Trust, according to Standard & Poor’s.
This is the first securitization to be issued from the trust and the first deal from the issuer to veer away from subprime loans.
The Chrysler Capital Division of Santander Consumer started originating prime retail auto loans in May 2013. Santander Consumer however has issued 22 subprime securitization transactions totaling approximately $27 billion over the past four years, according to S&P.
S&P assigned ratings to the deal dubbed Chrysler Capital Auto Receivables Trust 2013-A. The deal is structured with an ‘A1+’ money market tranche. It will also offer investors ‘AAA’ rated class A notes; ‘AA’-rated class B notes; ‘A’-rated class C notes; and ‘BBB’-rated class D notes.
Citigroup is lead arranger on the deal.
The issuer’s total serviced portfolio is made up by borrowers with FICOs greater than 630. S&P said that Santander has originated over $5 billion of these loans in the last four years.
“While Santander's new preferred lending program with Chrysler represents a sizable increase in monthly origination volume that could cause operational challenges, management has communicated to us that the requisite staffing resources were in place before the program started,” said S&P.