Subprime lending

The $426.2 million COLT 2017-2 is backed entirely by loans originated by Caliber, an affiliate of private equity firm Lone Star Funds. There are no loans originated by Sterling Bank & Trust, which accounted for 22% of the collateral for the prior deal.

The credit quality of the collateral is lower, by several metrics, than that of Exeter's prior deal; however, S&P Global expects cumulative net losses to be in the same range, from 20.1%-21.1%.

Powell downplayed fears about subprime auto lending, saying he aims to improve Santander Consumer's compliance culture, beef up customer services and expand its relationship with Chrysler Capital.

Scott Powell will lead the auto lender while continuing to serve as CEO of Santander Holdings, the U.S. division of the Spanish banking giant Banco Santander.

More than 20% of the pool is comprised of well-seasoned subprime auto loans previously securitized in American Credit Acceptance's asset-backed deals in 2012-2014.

Auto, personal and credit card originations have fallen as delinquencies have risen, but researchers called the slowdown a temporary rebalancing by lenders.

Both lenders are on their third auto-loan securitization of the year, with little variance from previous credit enhancement or expected loss levels.

Lower average FICOs and fewer loans to higher-qualified buyers are among the reasons DBRS has assigned a higher loss level to Westlake's latest transaction.

Loans with terms between 73 months and 75 months comprise 15.6% of the collateral for DRIVE Auto Receivables Trust 2017-2, up from 0.5% in 2017-1; yet Moody's Investors Service is holding its loss expectations stable.

The credit characteristics of the collateral are broadly similar to the sponsor's inaugural deal, completed in February, but the capital structure has been tweaked.