Non-prime auto loans originated by Exeter Finance will support $1 billion in securitized bonds from the Exeter Automobile Receivables Trust, series 2025-2.
Total initial hard credit enhancement on the notes amounts to 51.45% on all three senior notes, A1 through A3, according to Moody's Ratings. Outside of that, classes B, C, D and E get coverage amounting to 41.0%, 29.7%, 15.5% and 4.1%, respectively, Moody's said.
Unlike estimated excess spread, which increased to 13.2%, from 12.8% on the EART 2024-4 transaction, several other forms of credit enhancement levels, such as total initial hard credit enhancement, subordination, and initial overcollateralization, decreased on the EART 2025-2, according to S&P Global Ratings.
The notes are all fixed rate and will repay investors sequentially, the rating agencies said. They also gain protection from a reserve fund representing 1.0% of the balance, the rating agency said. Exeter will sell the notes through seven tranches, in a deal scheduled to close this week, according to Asset Securitization Report's deal database.
JPMorgan Securities, Wells Fargo Securities, BNP Paribas and Mizuho are joint bookrunners on the deal, according to the deal's Securities and Exchange Commission filing. Citigroup and Deutsche Bank Securities are co-managers.
The portfolio changed in several other ways, according to S&P. The weighted average (WA) payment to income percentage was 10.41%, down from 11.3% on the EART 2024-4 transaction. The WA non-zero FICO score decreased to 566, from 580.
Also, CarMax loans as a percentage of the portfolio decreased to 20.3%, from 27.0%, which is notable because they usually perform better than Exeter's core originations, S&P said.
S&P assigned A1+ to the A1 tranche; AAA to the A2 and A3 tranches; and AA, A, BBB and BB- to classes B, C, D and E, according to the rating agency. Moody's assigns ratings of P1 to the A1 notes; Aaa to the A2 through B notes; and Aa3, and Baa2 to classes C and D, respectively.
Moody's also said the notes have maturities ranging from April 15, 2026 on the P1-rated notes to October 15, 2032 on the class E notes.
