Auto ABS

Subordination and a reserve account are among the protections on notes supported by subprime loans on primarily used vehicles.

The class A notes, which KBRA assigns a AAA rating, and which have the bulk of the outstanding note balance, $259.3 million, benefits from an enhancement level of 61.10%.

Goldman Sachs and Obra Capital are providing loan funding, and the Crescent Auto Finance acquisition brings a technology platform and loan portfolio.

Performance in recent vintages of Tesla leases, specifically 2024, had weakened recently, leading to increased credit loss expectation for the deal by 0.75%.

The non-prime collateral pool starts out with 56,336 contracts, and an average balance of $26,041, which could be upsized to 71,695 contracts, with an average balance of $26,034.

Banks are bracing for hundreds of millions of dollars in losses, while investors who piled into asset-backed bonds sold by the company as recently as June have seen the prices of their securities plunge.

According to media reports, Tricolor suspended operations and furloughed its staff, with plans to liquidate.

The assets' legal isolation means that the NCUA exercising its powers in a way that would reduce payments to the notes is a remote possibility.

Moody's finds that Honda's underlying pool has a strong credit profile, and that tier A loans account for 77.1% for the base principal note amount.

While the CPSART program, especially the 2022 and 2023 series, was performing worse than its initial or revised expectations, the 2025-C collateral was relatively better.

A tariff-induced economic slowdown could dampen consumer debt payments.

Santander Drive Auto Receivables Trust, 2025-3, can be upsized to $2.1 billion, and the capital structures are the same for both pool sizes.

More than 10,000 prime retail loan contracts on mostly used cars will secure the notes.

The transactions represent Hertz's 16th and 17th term ABS transactions from the Hertz Vehicle Financing platform.

BofA Securities, Australia and New Zealand Banking Group and Japan's SMBC Bank International are joint lead managers.

Although the collateral is described as non-prime, Moody's points to several strong credit characteristics, including an average non-zero FICO score of 697 and an eScore of 768.

TALNT 2025-1's notes benefit from initial hard credit enhancement that totals 6.33% of the note balance.

All the senior notes—including A1, rated P1 and A2 through A4, rated Aaa—benefit from total initial hard credit enhancement equaling 4.80% of the pool balance.

The vehicles comprise the overcollateralization (OC), because of a highly liquid secondary market for them. That OC rate will shift according to the fleet mix.

The deal has a prefunding period through July, when more non-prime collateral can be purchased and added to the pool.