New York--(BUSINESS WIRE)-- Fitch Ratings expects to rate Santander Drive Auto Receivables Trust 2012-6 as follows:
--$348,800,000 class A-1 notes 'F1+sf';
--$329,150,000 class A-2 notes 'AAAsf'; Outlook Stable;
--$141,260,000 class A-3 notes 'AAAsf'; Outlook Stable;
--$151,840,000 class B notes 'AAsf'; Outlook Stable;
--$169,490,000 class C notes 'Asf'; Outlook Stable;
--$109,460,000 class D notes 'BBBsf'; Outlook Stable;
--$42,370,000 class E notes 'BBsf'; Outlook Stable.
Fitch's stress and rating sensitivity analysis are discussed in the presale report titled 'Santander Drive Auto Receivables Trust 2012-6', dated Oct. 1, 2012, which is available at 'www.fitchratings.com' or by clicking on the link below.
Key Rating Drivers:
Consistent Credit Quality: The credit quality of 2012-6 is representative of the subprime market and is similar to 2012-4 and 2012-5 (not rated [NR] by Fitch). The weighted average (WA) Fair Isaac Corp. (FICO) score is 598 and the internal loss forecasting score (LFS) is 576. Used vehicles total 70.6%, the WA loan-to-value (LTV) ratio is 115%, and WA seasoning totals 12 months.
Consistent Credit Enhancement Structure: The cash flow distribution is a sequential-pay structure. Initial hard credit enhancement (CE) is 44.0% for the class A notes. The reserve totals 2.00% (non-declining), and initial overcollateralization (OC) is 8.50% (both of the initial pool balance), growing to a target of 15.0% (of the current pool balance). CE levels are identical to 2012-5 (NR), but are slightly lower than 2012-4 for the class B and C notes.
Stable Portfolio/Securitization Performance: Losses on Santander Consumer USA, Inc.'s (SCUSA) portfolio and 2010-2011 securitizations declined from prior years supported by the economic rebound and strong used vehicle values elevating recovery rates.
Stable Corporate Health: SCUSA recorded solid financial results in 2011 and early 2012 and has been profitable since 2007. Fitch rates Santander, the majority owner of SCUSA, 'BBB+/F2' with a Negative Rating Outlook.
Consistent Origination/Underwriting/Servicing: SCUSA demonstrates adequate abilities as originator, underwriter, and servicer, evidenced by historical portfolio delinquency, loss experience, and securitization performance. Fitch deems SCUSA capable to service 2012-6.
Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of SCUSA would not impair the timeliness of payments on the securities.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Rating Criteria for U.S. Auto Loan ABS', April 16, 2012;
--'Global Structured Finance Rating Criteria', June 6, 2012;
--'Structured Finance Tranche Thickness Metrics', July 29, 2011.
Applicable Criteria and Related Research: Santander Drive Auto Receivables Trust 2012-6 (US ABS)
Global Structured Finance Rating Criteria
Rating Criteria for U.S. Auto Loan ABS
Structured Finance Tranche Thickness Metrics
Sean Egeran, CFA
One State Street Plaza
New York, New York 10004
Sandro Scenga, +1-212-908-0278 (New York)
Source: Fitch Ratings