A pool of subprime auto loan receivables will secure $639 million in asset-backed securities (ABS), through the American Credit Acceptance Receivables Trust, series 2025-1.
All notes from the trust will be fixed. The deal will repay investors through a senior-subordinate structure, with legal final maturity dates of July 12, 2028, March 12, 2029, Aug. 12, 2031 and Dec. 13, 2032 for the A, B, C and D, and E classes, respectively, according to S&P Global Ratings. The A, B, C, D and E notes have hard credit enhancement and haircut to excess spread giving them 64.4%, 57.7%, 46.7%, 37.8% and 34.1% in credit support, respectively.
Under a BBB stress scenario, S&P expects a 1.37x loss level, the rating agency said.
In terms of structural changes to the pool from the ACAR 2024-4 deal, subordination for the A, B and D classes increased to 47.0%, 38.3% and 7.05%, respectively. For class C, the subordination level is 21.3%, down from 21.5% on the previous deal.
A couple of other enhancements saw changes in the deal's capital structure, like target overcollateralization, which increased to the greater of 23.35% and 2.50% of the initial collateral balance. Also, pre-pricing excess spread was 15.40%, a slight decrease from 15.87%, mainly due to a higher weighted average cost of debt, S&P said.
In terms of the collateral structure, S&P noted that called collateral from various series increased to 6.0%, from 4.0%, while weighted average seasoning increased to 3.15 months from 2.82 months. On a WA basis, the loan-to-value ratio increased slightly to 118.94%, from 117.79% on the 2024-4 deal.
The pool contains 26,235 loans, with an average loan balance of $21,279, the rating agency said. Borrowers had a non-zero FICO score of 555, and a debt-to-income ratio of 14.19%, S&P said.
S&P assigns AAA to the class A notes; AA to the class B notes; A to the class C notes; and BBB and BB- to classes D and E, respectively.
