Two Ratings Raised, Five Ratings Affirmed On Two USAA Auto Owner Trust Transactions

Stocks and Financial Services Press Releases Friday December 22, 2017 09:10
NEW YORK--22 Dec--S&P Global Ratings
  • We reviewed two USAA Auto Owner Trust transactions backed by pools of prime retail auto loans originated and serviced by USAA Federal Savings Bank.
  • We raised our ratings on two subordinated classes from USAA Auto Owner Trust 2015-1 and 2016-1.At the same time, we affirmed our 'AAA (sf)' ratings on five classes from the same transactions.

NEW YORK (S&P Global Ratings) Dec. 21, 2017--S&P Global Ratings today raised its ratings on two classes and affirmed its ratings on five classes from USAA Auto Owner Trust 2015-1 and 2016-1 (see list). The transactions are backed by prime retail auto loans originated and serviced by USAA Federal Savings Bank.

Today's rating actions reflect collateral performance to date and our expectations regarding future collateral performance, as well as each transaction's structure and credit enhancement. Additionally, we incorporated secondary credit factors, including credit stability, payment priorities under various scenarios, and sector- and issuer-specific analyses. Considering all these factors, we believe the creditworthiness of the notes remains consistent with the raised and affirmed ratings.

USAA Auto Owner Trust 2015-1 and 2016-1 are performing better than our revised loss expectation of 0.50%-0.70% and initial loss expectation of 0.60%-0.80%, respectively. Therefore, we are lowering our expectations for both series

Each transaction contains a sequential principal payment structure in which the notes are paid principal by seniority. Each also has credit enhancement in the form of a nonamortizing reserve account, overcollateralization, subordination for the higher-rated tranches, and excess spread. The credit enhancement for each of the transactions is at the specified target or floor, and each class' credit support continues to increase as a percentage of the amortizing collateral balance

For every series 2015-1 class and for the series 2016-1 class A notes, the raised and affirmed ratings reflect our view that the hard credit support alone (no credit to excess spread) as a percentage of the amortizing pool balance, compared with our expected remaining losses, is commensurate with each raised or affirmed rating. For the series 2016-1 class B notes, we incorporated a cash flow analysis to assess the loss coverage level, giving credit to excess spread. Our various cash flow scenarios included forward-looking assumptions on recoveries, timing of losses, and voluntary absolute prepayment speeds that we believe are appropriate given the transaction's performance to date. In our view, the results demonstrated that the class B notes have credit enhancement consistent with the raised rating level.

Aside from our break-even cash flow analysis, we also conducted sensitivity analyses for both series to determine the impact that a moderate ('BBB') stress scenario would have on our ratings if losses began trending higher than our revised base-case loss expectation. The results show consistency with our credit stability criteria for each raised and affirmed rating.

We will continue to monitor the performance of all of the outstanding transactions to evaluate if the credit enhancement remains sufficient, in our view, to cover our cumulative net loss expectations under our stress scenarios for each of the rated classes.

Latest Press Release

KTC invites book lovers to enjoy Big Bad Wolf Book Sale Chiang Mai 2018.

"KTC" or Krungthai Card Public Company Limited in cooperation with Ready To Read Company Limited give privilege to KTC cardmembers in Chiang Mai and its nearby provinces to enjoy the book fair "Big Bad Wolf Book sale Chiang Mai 2018" with more than 1...

KBank and CENTRAL Group launch K DAY Hey DAY@CENTRAL I ZEN campaign

To promote K-Credit Card as the "Lifestyle Credit Card" under the One Card for Use Every Day Concept, KBank has teamed up with a retail giant CENTRAL Group to unveil the "K DAY Hey DAY@CENTRAL I ZEN" special campaign to please every K-Credit Cardholder....

Siam Commercial Bank and SCB Abacus announces success of AI-powered lending platform for SMEs on Lazada to capture booming e-commerce trend

The new solution marks Thailand's first e-marketplace end-to-end digital lending platform and reinforces SCB's industry leadership Siam Commercial Bank (SCB) announces the success of "Clickcash" (Mae Manee Sri Online), Thailand's first end-to-end...


The FinLab announced the launch of its Smart Business Transformation Programme to help Thailand-based small- and medium-sized enterprises (SMEs) transform their businesses through digital solutions. The programme is supported by United Overseas Bank...

Photo Release: KBank teams up with PTTOR to offer first KBank Service at Cafe Amazon, PTT Service Station (Ekamai-Ramintra)

Ms. Jiraporn Khaosawas (1st from left), Chief Executive Officer and Managing Director of PTT Oil and Retail Business PCL. (PTTOR), and Mr. Patchara Samalapa, KBank President, recently introduced "KBank Service" or deposit service at Cafe Amazon, PTT...

Related Topics