Westlake's third securitization of subprime auto loans of the year is characteriized by loans to stronger borrowers than any of the sponsor's transactions to date, according to Standard & Poor's.

The pool of collateral for Westlake's Series 2015-3 has a weighted average (WA)FICO of 604, up from 587 in the prevoius deal; the percentage of platinum loans ( Westlake's top tier loan product) increased to 7.65% from 4.19%; and the percentage of borrowers in the gold program increased to 35.34% from 30.97%. As a result, the WA score for Westlake's proprietary scoring model increasing to 2.58 from 2.47. 

DBRS and S&P assigned preliminary ratings of 'A-1+'/ 'R-1'  to $87 million of money market notes; 'AAA' ratings to $149.8 million of class A-2 notes; double-A ratings to $26.8 million of class B notes; single-A ratings to $37 million of class C notes; triple-B ratings to $31.4 million of class D notes; and double-B ratings to $17.8 million of class E notes. The class A2 notes through the class D notes are structured with a legal final of May 15, 2021; the class E notes mature on July 15, 2022.

Credit support on the notes remains at the same level as the previous Westlake transaction, Series 2015-2" class A notes have 31.65% credit support, class B notes have 24.14% credit support, class C notes have 13.79% credit support and the class D notes have 5% credit support.

JP Morgan Securities in the lead underwriter.

But leverage in the Westlake's securitization pool is on rise. The deal's WA loan to value ratio increased to 113.48% from 110.95% in the 2015-2 transaction issued in June. According to S&P, LTV has generally increased with each pool since the 2011 series; however, the rating agency said that higher leverage in the pool is offset by the higher percentage of newer, low-mileage vehicles and potentially better-quality obligors coming from franchised dealers.

On Sept. 30, 2015, Westlake settled with Consumer Financial Protection Bureau over alleged violations of consumer financial laws relating to collection and repossession calls, modifications to contract terms and advertisement of annual percentage rates. Westlake has agreed to pay $26.7 million in consumer remuneration, $4.25 million in civil penalties ad $18 million in credit to certain deficiency accounts.

S&P said that the payments will not have a "material effect" on Westlake's liquidity and is not likely to affect the sponsor's securitization.

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