Fitch Rates Santander Drive Auto Receivables Trust 2014-2

NEW YORK--()--Fitch Ratings has assigned the following ratings to the Santander Drive Auto Receivables Trust 2014-2 notes:

--$330,000,000 class A-1 notes 'F1+sf';

--$275,620,000 class A-2A notes 'AAAsf'; Outlook Stable;

--$125,000,000 class A-2B notes 'AAAsf'; Outlook Stable;

--$163,550,000 class A-3 notes 'AAAsf'; Outlook Stable;

--$189,330,000 class B notes 'AAsf'; Outlook Stable;

--$191,720,000 class C notes 'Asf'; Outlook Stable;

--$74,780,000 class D notes 'BBBsf'; Outlook Stable;

--$81,938,000 class E notes 'BBsf'; Outlook Stable.

KEY RATING DRIVERS

Weaker Credit Quality: 2014-2 is backed by marginally weaker collateral versus 2014-1 and 2013 pools, with modestly weaker internal loss forecast credit scores (LFS), and extended term loans (60+ months) increased to 90%, up from 2014-1 to the highest level to date.

Sufficient Credit Enhancement and Structure: The cash flow distribution is a sequential-pay structure. Initial hard credit enhancement (CE) for the class A, B, and C notes is unchanged from 2014-1, but increased for the D and E notes. Hard target CE is slightly lower for the class A-C notes but increased from the D and E notes, all versus 2014-1.

Stable Portfolio/Securitization Performance: SCUSA's portfolio and 2010-2012 securitization performance improved since the recession, with relatively low losses. However, recent 2013 losses have risen and are tracking slightly above the 2012 vintage, driven by marginally weaker collateral underwriting combined with lower recoveries as used vehicle values softened over the past year.

Stable Corporate Health: SCUSA recorded solid financial results recently and has been profitable since 2007. Fitch rates Santander, majority owner of SCUSA, 'BBB+/F2' with a Stable Rating Outlook.

Consistent Origination/Underwriting/Servicing: SCUSA demonstrates adequate abilities as originator, underwriter, and servicer as evidenced by historical portfolio delinquency, loss experience, and securitization performance.

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.

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.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than the base case and could result in potential rating actions on the notes. Fitch evaluated the sensitivity of the ratings assigned to SDART 2014-1 to increased credit losses over the life of the transaction. Fitch's analysis found that the transaction displays some sensitivity to increased defaults and credit losses, showing a potential downgrade of one or two categories under Fitch's moderate (1.5x base case loss) scenario, especially for the subordinate bonds. The notes could experience downgrades of up to three or more rating categories, under Fitch's severe (2.5x base case loss) scenario.

Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report.

The presale report is available to all investors on Fitch's website at 'www.fitchratings.com'. For more information about Fitch's comprehensive subscription service Fitch Research, which includes all presale reports, surveillance, and credit reports on more than 20 asset classes, contact product sales at +1-212-908-0800 or at 'webmaster@fitchratings.com'.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 2013);

--'Rating Criteria for U.S. Auto Loan ABS' (April 2014);

--'Criteria for Interest Rate Stresses in Structured Finance Transactions' (January 2014);

--' Santander Drive Auto Receivables Trust 2014-2' (US ABS) (April 2014);

--' Santander Drive Auto Receivables Trust 2014-2 - Appendix' (April 2014);

--'Structured Finance Tranche Thickness Metrics' (July 2011).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Rating Criteria for U.S. Auto Loan ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=738718

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=725537

Structured Finance Tranche Thickness Metrics

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646951

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=827539

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Contacts

Fitch Ratings
Primary Analyst:
Eugene Kushnir, +1-212-908-0830
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst:
Khadija Mediouri, +1-212-908-0109
Analyst
or
Committee Chairperson:
Du Trieu, +1-312-268-2091
Senior Director
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst:
Eugene Kushnir, +1-212-908-0830
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst:
Khadija Mediouri, +1-212-908-0109
Analyst
or
Committee Chairperson:
Du Trieu, +1-312-268-2091
Senior Director
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
sandro.scenga@fitchratings.com