Veros Auto Receivables Trust's first securitization of the year is a $274.6 million issuance supported by a pool of auto loan contracts extended to subprime borrowers to purchase used vehicles.
The platform will issue notes through six tranches of class A, B, C, D E and F notes, according to analysts at S&P Global Ratings and Kroll Bond Rating Agency.
VART 2026-1 is an expanded deal, compared to the 2025-1 series of notes. The current transaction will sell notes to investors through additional classes. KBRA refers to the deal as VEROS 2026-1.
Deutsche Bank Securities is managing the deal, which is slated to close on Feb. 27, 2026, according to Asset Securitization Report's deal database.
Following the closing date, VART 2026-1's notes will amortize toward maturity dates of Sept. 15, 2028 for the class A notes; May 15, 2029 on the class B notes; July 15, 2031 on classes C, D and E, and Sept. 15, 2032 on class F, according to S&P.
As for credit enhancements, notes get a credit boost from overcollateralization, although that level decreased to 7.35% from 11.45% of the initial collateral pool balance, S&P said. As for the target overcollateralization level, that is 7.35%, a decrease from 11.45%, S&P said.
Further, a reserve account is in place, although its balance decreased to 1.00% of the initial pool balance from 1.50% compared with the previous deal. Also, pre-pricing excess spread was 13.89%, S&P said.
The smaller reserve account balance wasn't the only structural change from the previous deal, S&P said. Total initial hard credit enhancement levels are up, with 58.05%, 46.70%, 35.00%, 20.25%, 11.55%, and 8.35%, on classes A, B, C, D, E and F, respectively, S&P said.
Subordination also increased for all the classes, S&P said.
By the deal's cutoff date, Dec. 31, 2025, VEROS 2026-1 had about $296.4 million of auto loans in its collateral pool, KBRA said. The loans had a weighted average (WA) borrower non-zero credit bureau score of 589, an average principal balance was $16,555, and a WA interest rate of 22.93%, according to KBRA.
Veros Credit, the deal sponsor, originated the underlying loans and will also service them, KBRA said. S&P notes that Vervent is the backup servicer.
