Santander Retail Auto Lease Trust 2019-A's Notes Assigned Preliminary Ratings


  • Santander Retail Auto Lease Trust 2019-A's issuance is an ABS transaction backed by prime auto lease receivables.
  • We assigned our preliminary ratings to the class A-1, A-2-A/A-b-B, A-3, A-4, B, C, and D notes.
  • The preliminary ratings reflect our view of the transaction's payment, credit, and legal structures, the expected timing of the residuals' maturities, and the credit quality of the underlying collateral, among other factors.
 
NEW YORK (S&P Global Ratings) April 3, 2019--S&P Global Ratings today assigned 
its preliminary ratings to Santander Retail Auto Lease Trust 2019-A's 
asset-backed notes series 2019-A (see list).

The note issuance is an asset-backed securities (ABS) transaction backed by 
prime auto lease receivables.

The preliminary ratings are based on information as of April 3, 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 30.0%, 27.0%, 21.0%, and 16.0% credit enhancement for the class A, B, C, and D notes, respectively, in the form of 13.55%, 10.35%, and 4.60% subordination, respectively, to the class A, B, and C notes; 9.00% overcollateralization, which is expected to build to a target of 11.20% and step down to 10.00% after the class A-2 notes are paid in full; a 0.25% nonamortizing reserve account; and excess spread (all percentages are expressed as a percentage of the pool's initial aggregate securitization value).
  • The credit quality of the underlying collateral, which consists of prime auto lease receivables that have a weighted average FICO score of 751.
  • The diversified mix of vehicle models and vehicle types in the pool.
  • The expected timing of the residuals' maturities.
  • The historical residual retention values of vehicles in the pool.
  • Automotive Lease Guide's forecast of each vehicle's residual value at lease inception and of current residuals.
  • The timely interest and full principal payments by the notes' legal final maturity dates made under cash flow scenarios that were stressed for credit, residual, and incentive program losses that are consistent with the assigned preliminary ratings.
  • Our expectation that under a moderate ('BBB') stress scenario, all else being equal, our ratings on the class A and B notes will remain within one rating category of the assigned preliminary ratings during the first year, and our ratings on the class C and D notes will remain within two rating categories of the assigned preliminary ratings. This is within the outer bounds of our credit stability criteria (see "Methodology: Credit Stability Criteria," published May 3, 2010).
  • Our view of Santander Consumer USA Inc.'s long history in the auto finance business. Although it started primarily as a subprime auto finance company, it has been underwriting and servicing a wide spectrum of Fiat Chrysler auto loan receivables since May 2010 and auto lease receivables since April 2013 through its strategic alliance with FCA. In addition, the company has been active in prime-quality auto finance since Banco Santander's acquisition of Sovereign Bank in January 2009.
  • Our view of the transaction's payment, credit, and legal structures.
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