Auto ABS

The company is coming off of a recent period of performance improvements, with gains in net income, cash and cash equivalents.

In one of the deal's positive credit attributes, none of the underlying loans in the collateral have terms longer than 72 months. Such longer-term loans have historically performed worse than shorter-term loans.

Subprime auto loans will repay the outstanding notes, and the collateral pool includes changes such as 85.67% of originated loans in the current pool, with a cutoff date of September 30, falling within CPS' top five credit tiers.

All of the class A notes, of which there are four tranches of notes, have a credit enhancement level of 7.55%, while classes B and C have credit enhancement levels of 5.75% and 2.75%.

As interest rates rise and delinquencies among borrowers with poor credit scores soar, investors are increasingly scrutinizing the riskiest slices of asset-backed securities sold by some subprime auto lenders. That's forced certain issuers to postpone deals or sweeten terms.

Regardless of HAROT 2023-4's issuance amount, which could reach $1.8 billion, all of the notes have total initial hard credit enhancement levels of 2.75%, and a reserve fund of 0.25%.

ACAR 2023-4 pool has a weighted average (WA), non-zero FICO score of 551, noticeably higher than the 535 FICO score of 2023-2.

S&P sets out to rate $83.85 million in several subordinate notes, all of which are secured by auto loans, and which are expected to mature in January 2034.

DriveTime is a longtime issuer, but Bridgecrest Lending Auto Securitization is the first securitization of the sponsor's assets that Bridgecrest Acceptance services.

The transaction could be upsized to $1.25 billion, from $1 billion, but the 4.00% overcollateralization level is expected to remain constant through the life of the deal.