Subprime lending

DriveTime's latest has initial hard credit enhancement that ranges from 55.70% for the class A notes to 15.40% for the class E notes, and the company just bumped up its warehouse commitment.

A vast majority of the collateral, a combined 82.73%, have terms of between 49-60 months (58.46%) and 61-72 months (24.27%), while a slight majority of the pool (51.66%) have no credit scores.

The subprime auto lender has a good track record, but there are concerns about used-car prices normalizing, according to KBRA.

Subprime borrowers whose credit scores have risen since they bought their cars are increasingly looking for a better deal. Credit unions and small banks are seizing the opportunity, often with the help of fintechs.

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.

A pool of subprime auto loans, new and used, and approved with a heavily automated, technology driven and multi-step process underpin a $559 million deal.

Carvana Auto Receivables Trust 2021-N2 is the used-car retailer's ninth securitization since 2019, and the third to include a pool exclusively made of non-prime loans.

This week, Moody’s Investors Service projected elevated credit-loss expectations for a new subprime auto-loan securitization from Veros Credit, even though the new deal has several improved credit metrics compared to the company’s prior ABS offering in March 2020.

If the lender's trust opts to upsize its second bond offering of 2021, the $2 billion-plus transaction would be Santander's biggest in the post-crisis era.

Deals, trends and research in structured finance and asset-backed securities for the week of April 30-May 6