Byrider Leads a Parade of April Subprime Auto ABS Deals
Byrider Finance on Friday closed on the first of three subprime auto ABS deals that have entered the April pipeline.
Byrider, which finances used vehicles on a “buy here, pay here” basis at its 142 company-owned and franchised lots across the country, priced $126.2 million in securities through its CarNow Auto Receivables Trust 2021-1 vehicle, backed by a pool of subprime auto loans underwritten to borrowers with a weighted average FICO of 556.
Also launching deals last week were Santander Consumer USA and DriveTime Automotive Group.
In Byrider’s CarNow transaction, the pool’s high-leverage loans (159.5% weighted-average loan-to-value) carry current loan balances of $11,073 after nine months of seasoning, on 54-month original terms. The WA coupon is 21.12%. All of the loans are underwritten serviced by Byrider Finance.
Kroll Bond Rating Agency assigned AA ratings to the senior $78.9 million Class A tranche due October 2024, which is supported by 46% credit enhancement (slightly lower than the prior deal by Byrider, which is owned by Altamont Capital Partners). The Class A notes priced at a fixed-rate coupon of 0.97%.
In Santander’s Drive Auto Receivables Trust 2021-1, the lender is sponsoring a $1.25 billion securities offering of its deeper subprime assets of its riskier low- or non-FICO loans. The deal could potentially be upsized to $1.56 billion, according to presale reports from S&P Global Ratings and Moody’s Investors Service.
The 75,790 retail installment contract loans in the deal were either acquired or originated by Santander. The weighted average non-zero FICO for the deal is 582, with borrowers paying an average of 19.01% APR on the contracts. The loans with original terms of 71 months are seasoned an average of five months.
About 72% of the contracts are for used vehicles.
Moody’s expected cumulative net loss on the deal is 23.5%, while S&P has an expected CNL range of 22.5%-23.5% for the 15thissuance from Santander’s Drive platform.
Each agency has assigned triple-A ratings to the senior portion of the capital stack.
The $435 million DT Auto Owner Trust 2021-2 is the second deal sponsored this year by DriveTime, and the 69thoverall since the used-vehicle retailer began securitizing its originations in 1996.
The deal includes five classes of notes, including a $235 million Class A tranche with preliminary AAA ratings from Kroll and S&P. All the notes will be backed by a pool of approximately $500 million in subprime auto loans that have average APRs of 22.51% on loans with average remaining principal balances of $16,991. The WA original terms were 68 months, with three months of seasoning.
The transaction includes a three-month prefunding period in which DriveTime is expected to add $100 million of pool-eligible loans to the deal after closing.
Kroll has an expected base-case loss range of 27.5%-29.5%; S&P’s expected loss is 27.75%-28.75%.