Kroll Bond Rating Agency (KBRA) announces the preliminary ratings to four classes of DT Auto Owner Trust 2016-1 (DTAOT 2016-1), a subprime auto asset-backed securities transaction.

DTAOT 2016-1 will issue $340.00 million of notes collateralized by approximately $461.02 million of subprime auto loan receivables. The preliminary ratings reflect the initial credit enhancement levels ranging from 65.00% for the Class A notes to 27.75% for the Class D notes, which build to 69.40% and 32.15% for the Class A and Class D notes, respectively.

This transaction represents the first term ABS securitization in 2016 for DriveTime Automotive Group, Inc. (DriveTime or “the Company”). The Company has issued 59 securitizations since 1996. This is the sixth securitization that Kroll Bond Rating Agency (KBRA) has rated for DriveTime.

DriveTime is a leading used vehicle retailer in the United States that focuses on both the sale and financing of vehicles within the subprime market. DriveTime’s business model consists of vehicle acquisition, reconditioning, sales, leasing, underwriting, financing, loan servicing and after-sale support. As of December 31, 2015, DriveTime owned and operated 132 dealerships in 25 states.

KBRA applied its U.S. Auto Loan ABS methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and DriveTime’s historical static pool data. KBRA also conducted an operational assessment of DriveTime, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.

For complete details on the analysis, please KBRA’s Pre-Sale Report, DT Auto Owner Trust 2016-1 Pre-Sale Report which was published today at www.kbra.com.

Preliminary Ratings Assigned: DT Auto Owner Trust 2016-1

Class   Rating   Expected Initial Principal Balance
A   AAA(sf)   $168,270,000
B   AA(sf)   $47,250,000
C   A(sf)   $55,320,000
D   BBB(sf)   $69,160,000
   

Related Publications:

U.S. Auto Loan ABS Rating Methodology

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).