Drive Auto Receivables Trust 2019-1 Notes Assigned Preliminary Ratings

OVERVIEW
  • Drive Auto Receivables Trust 2019-1's issuance is an ABS transaction backed by subprime auto loan receivables.
  • We assigned our preliminary ratings to the class A-1, A-2-A/A-2-B, A-3, B, C, and D notes.
  • The preliminary ratings reflect our view of the transaction's credit support and payment, credit enhancement, and legal structures, among other factors.
 
NEW YORK (S&P Global Ratings) Jan. 9, 2019--S&P Global Ratings today assigned 
its preliminary ratings to Drive Auto Receivables Trust 2019-1's automobile 
receivables-backed notes series 2019-1 (see list).

The note issuance is an asset-backed securities transaction backed by subprime 
auto loan receivables.

The preliminary ratings are based on information as of Jan. 9, 2019. 
Subsequent information may result in the assignment of final ratings that 
differ from the preliminary ratings.

The preliminary ratings reflect:
  • The availability of approximately 59.2%, 53.4%, 43.9%, and 35.7% credit support for the class A (consisting of classes A-1, A-2-A/A-2-B, and A-3), B, C, and D notes, respectively, based on stressed cash flow scenarios (including 100% credit to excess spread), which provide coverage of approximately 2.40x, 2.15x, 1.75x, and 1.40x, for our 24.0%-25.0% expected cumulative net loss. These break-even scenarios cover total cumulative gross defaults of 85%, 76%, 63%, and 55%, respectively.
  • The timely interest and principal payments made under stressed cash flow modeling scenarios are appropriate to the assigned preliminary ratings.
  • The expectation that under a moderate ('BBB') stress scenario (1.40x our expected loss level), all else being equal, our rating on the class A notes will remain at the assigned preliminary 'AAA (sf)' rating; our ratings on the class B and C notes would not likely decline by more than one rating category of the assigned preliminary 'AA (sf)' and 'A (sf)' ratings, respectively; and our rating on the class D notes would likely not decline by more than two rating categories of the assigned preliminary 'BBB (sf)' rating while they are outstanding. These rating movements are within the limits specified by our credit stability criteria (see "Methodology: Credit Stability Criteria," published May 3, 2010).
  • The originator/servicer's history in the subprime/specialty auto finance business.
  • Our analysis of approximately 10 years of static pool data on Santander Consumer USA Inc.'s lending programs.
  • The transaction's payment, credit enhancement, and legal structures.