Auto ABS

DriveTime's improving loss performance in recent securitizations allowed it to relax the enhancement levels on its first securitization of the year.

The transaction is the second this year involving Santander's Chrysler Capital preferred-lender unit; in January Santander sold bonds on its first-ever deal backed by Fiat Chrysler leases.

Despite riskier terms, rising delinquencies and falling used car values, investors keep buying bonds backed by prime and subprime auto loans and leases.

Credit support on the senior tranche of the $800 million transaction is 19.25%, up 250 basis points on the comparable tranche of the sponsor's previous deal to offset the impact of falling used car prices.

It's deep and liquid, and spreads are tight. To many, a deal with a few idiosyncratic risks — not to mention cool factor — just offers a chance to pick up a little extra yield.

Over 94% of the collateral pool consists of diesel-engine vehicles, even though diesel cars have had waning interest among French drivers in the past decade.

The Detroit company recorded an 11% increase in car loans and leases originated during the fourth quarter, as well as a jump in yields. Ally appears to be benefiting from Wells Fargo's substantial retrenchment in auto lending.

The single-B rated company is facing a large cash requirement as it ramps up production of its Model 3; but leases backed by electric vehicles pose additional risks for investors in asset-backeds.

The Irving, Tex.-based specialty lender boosted senior-note credit enhancement levels and has stabilized portfolio losses to break the AA ratings cap on its deals, according to S&P Global Ratings.

Hertz Vehicle Financing II LP, Series 2018-1, is a master trust, and the notes share collateral on a pari passu, or equal basis, with Hertz’ other outstanding series of notes.