The Spanish bank has been making heavy use of significant risk transfers, which allow banks to free up capital used to back up loans by paying investors to take on some of the credit risk.

Openbank, which has operated in parts of Europe for years, should help the Spanish bank to fund its U.S. auto lending business, executives said.

In a potential credit drawback, TALT 2024-B has a residual value setting of 51.3% of the manufacturer's price. It was less than 50% in all the 2023 lease securitizations.

Although the notes are supported by non-prime assets, Banco Santander sits at the top of the transaction's ownership chain and has a stable long-term, senior unsecured debt rating of A2.

With tougher capital requirements looming, a number of regionals including U.S. Bancorp, Huntington and Santander are using these new instruments to share risk with nonbank investors and lighten their capital load. Experts point out the pros and cons.

SDART 2023-2 will build overcollateralization (OC) as it amortizes, initially 23.75%, which is expected to build to a target OC level of 32.50%.

Initially, the notes have 25.50% of over-collateralization (OC) of the initial pool balance, and that is expected to build to a target OC level of 35.00%.

The Spanish bank’s U.S. holding company said it will pay a premium to purchase the publicly traded shares in Santander Consumer Holdings. The proposal is subject to the approval of the auto lender’s board of directors.

New CEO Tim Wennes is counting on soon-to-launch digital offerings to boost consumer loans and deposits and playing up Santander's international reach in a bid to win over middle-market and corporate clients.