Santander Consumer USA's latest securitization of non-prime auto loans, will support at least $1.2 billion in asset-backed securities (ABS) from the Drive Auto Receivables Trust, series 2025-2.
The underlying loans are considered deep non-prime quality, according to Moody's Ratings and Morningstar | DBRS, whose analysts rated the deal. Borrowers on the underlying loans have a FICO score of 585 and a loan-to-value (LTV) ratio of 112.5%, both on a weighted average (WA) basis.
The securitization amount can be upsized to $1.5 billion, and the capital structure is expected to be the same. Total initial hard credit enhancement ranges from 48.35% on P1 notes to 15.50% on the notes rated Baa2.
DBRS points out that initial credit enhancement on the class A notes will be 48.35%, which include a reserve account representing 1.00% of the note balance, the rating agency said.
Maturities range from Oct. 15, 2026 through Dec. 15, 2032.
Also on a WA basis, the loans have an original debt-to-income (DTI) ratio of 39.5%. Most of the loans, 71.4%, are on used cars, according to the rating agencies.
The collateral pool starts out with 56,336 contracts, which have an average contract balance of $26,041, according to the rating agencies. That pool could be upsized to 71,695 contracts, with a slightly smaller average balance of $26,034. In both cases, the loans had an original term of 72 months, and a remaining term of 67 months, the rating agencies.
Lead underwriters include
The notes are priced to the one-month I-curve, with an expected coupon of 4.29% on the notes rated Aaa/AAA by Moody's and DBRS, respectively. Outside of that, coupons are expected to range from 4.14% on the Aaa/AAA notes to 4.9% on the Baa2/BBB notes.
Moody's assigns ratings of Aaa to the A2 through class B notes; Aa3 on the class C notes; and Baa2 on the class D notes. DBRS assigns AAA to classes A2 and A3; AA to the class B notes; A to the class C notes and BBB to the class D notes.
