The Dallas-based lender's third foray into the deep subprime ABS market in 2018 arrives as recent Santander DRIVE securitizations are performing well with recently lowered loss expectations from S&P Global Ratings.
Bavarian Sky UK 2 plc is as yet unsized; the collateral will initially consist of 70% new and 30% used primarily BWM and MINI vehicles, 56% of which use diesel fuel, according to Moody's Investors Service.
The rental car giant is issuing approximately $213 million each of notes maturing in July 2021 and July 2023 from its revolving master trust, Hertz Vehicle Financing II LP, according to rating agency presale reports.
The subprime lender could lose a big partner now that Fiat Chrysler has officially announced it will form its own auto finance unit, and the two are negotiating an end to their 6-year-old relationship.
Despite a steep drop in average FICO and increase in extended-term loans, DriveTime is shaving overcollateralization levels thanks in part to improved performance from its outstanding securitization portfolios.