Non-prime loans to purchase new and used vehicles, including light-truck and utility vehicle loans will secure $1.3 billion in auto asset-backed securities (ABS) from sponsor Santander Bank.
The transaction, Santander Drive Auto Receivables Trust, 2026-A, will sell the notes through seven tranches of class A, B, C, D and E coming to market through lead underwriter Citigroup
Global Markets, according to analysts at Fitch Ratings.
SDART 206-A’s most senior tranche of notes, A-1, rated F1+, has a legal final maturity date of Oct. 15, 2027. Other maturities in the pool range from Feb. 15, 2030 on the A2 notes to Nov. 15, 2034 on the class E notes, according to Fitch Ratings.
A pending merger between Santander Bank, N.A. (SBNA) and Santander Consumer USA is changing the originator for the SDART program, impacting future deals. Unlike previous SDART transactions, whose assets were originated and acquired by Santander Consumer, the entity SBNA originated and acquired the underlying loans, Fitch said.
Also, this deal will be issued under rule 144A, not registered with the Securities and Exchange Commission, Fitch said.
Classes A1 through A3 will benefit from credit enhancement levels representing 39.30% of the note balance, according to Fitch. Classes B, C, D and E will receive credit enhancement levels of 30.95%, 22.10%, 12.20% and 6.00%, respectively.
The underlying asset pool contains 58,228 contracts, with average balances of $25,758, Fitch said. The loans have a weighted average (WA) annual percentage rate of 18.00%, a slightly elevated leverage of a 109.70% loan-to-value (LTV) ratio, and a remaining term of 64.80%, the rating agency said.
Borrowers have a non-zero WA FICO score of 605. Just 9.9% of the borrowers have no FICO score and only 3.28% of the vehicles in the pool are hybrid and electric engineered vehicles.
Geographically, Texas represents the largest concentration of borrowers, 17.80%. After that Florida, California, North Carolina and Georgia represent 12.40%, 7.90%, 4.89% and 4.52%, respectively.
Fitch assigns ratings of AAA on classes A2 and A3; and AA, A, BBB and BB, to the B, C, D and E notes.
