Fitch Upgrades 6 and Affirms 12 Classes from 4 Santander Drive Auto Receivables Trusts

NEW YORK--()--As part of its ongoing surveillance, Fitch Ratings has taken the following rating actions on the Santander Drive Auto Receivables Trust (SDART) 2012-5, 2013-1, 2015-1 and 2015-5 transactions:

2012-6

--Class C affirmed at 'AAAsf'; Outlook Stable;

--Class D upgraded to 'AAAsf' from 'AAsf'; Outlook revised to Stable from Positive;

--Class E upgraded to 'AAsf' from 'Asf'; Outlook Positive.

2013-1

--Class C affirmed at 'AAAsf'; Outlook Stable;

--Class D upgraded to 'AAsf' from 'Asf'; Outlook Positive;

--Class E upgraded to 'Asf' from 'BBBsf'; Outlook Positive.

2015-1

--Class A-3 affirmed at 'AAAsf'; Outlook Stable;

--Class B upgraded to 'AAAsf' from 'AAsf'; Outlook revised to Stable from Positive;

--Class C upgraded to 'AAsf' from 'Asf'; Outlook Positive;

--Class D affirmed at 'BBBsf'; Outlook Positive;

--Class E affirmed at 'BBsf'; Outlook revised to Positive from Stable.

2015-5

--Class A-2-A affirmed at 'AAAsf'; Outlook Stable;

--Class A-2-B affirmed at 'AAAsf'; Outlook Stable;

--Class A-3 affirmed at 'AAAsf'; Outlook Stable;

--Class B affirmed at 'AAsf'; Outlook revised to Positive from Stable;

--Class C affirmed at 'Asf'; Outlook revised to Positive from Stable;

--Class D affirmed at 'BBBsf'; Outlook revised to Positive from Stable;

--Class E affirmed at 'BBsf'; Outlook revised to Positive from Stable.

KEY RATING DRIVERS

The rating actions are based on available credit enhancement (CE) and loss performance. The collateral pools continue to perform within Fitch's expectations. Under the CE structures, the securities are able to withstand stress scenarios consistent with the recommended ratings and make full payments to investors in accordance with the terms of the documents.

To date, the transactions have exhibited strong performance with losses within Fitch's initial expectations, with rising loss coverage and multiple levels consistent with the recommended ratings. A material deterioration in performance would have to occur within the asset pool to have potential negative impact on the outstanding ratings.

For 2012-6, 2013-1 and 2015-1, Fitch revised its loss proxies downward as losses are currently extrapolating below Fitch's base case loss proxies assigned at prior reviews. Based on current loss trends, Fitch expects cumulative net losses (CNL) for these three transactions to be in the 11%-15% range.

Fitch is not yet recommending revising the 2015-5 base case loss proxy due to the lower amount of seasoning. Should performance continue to be well within initial expectations, Fitch may also revise the proxy downward at subsequent reviews.

The upgrades reflect the improved loss coverage available to the notes. Further, Fitch will continue to monitor all four transactions and may take additional rating actions in the future. The ratings reflect the quality of Santander Consumer USA, Inc.'s retail auto loan originations, the adequacy of its servicing capabilities, and the sound financial and legal structure of the transaction.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxies and impact available loss coverage and multiples levels for both transactions. Lower loss coverage could impact ratings and Rating Outlooks, depending on the extent of the decline in coverage.

In the 2015-1 and 2015-5 transactions, the class E notes do exhibit a slight decline in loss coverage multiples under a back-ended loss timing scenario. Despite the declines observed, the net loss coverage multiples are still within range of the recommended multiples for each recommended rating.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 2016)

https://www.fitchratings.com/site/re/886006

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 17 May 2016)

https://www.fitchratings.com/site/re/879815

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/site/re/883130

Rating Criteria for U.S. Auto Loan ABS (pub. 21 Mar 2016)

https://www.fitchratings.com/site/re/878723

Related Research

Santander Drive Auto Receivables Trust 2012-6 -- Appendix

https://www.fitchratings.com/site/re/731835

Santander Drive Auto Receivables Trust 2013-1 -- Appendix

https://www.fitchratings.com/site/re/731975

Santander Drive Auto Receivables Trust 2015-1 -- Appendix

https://www.fitchratings.com/site/re/861524

Santander Drive Auto Receivables Trust 2015-5 -- Appendix

https://www.fitchratings.com/site/re/872193

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1012710

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1012710

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch's factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch's ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed.

The information in this report is provided "as is" without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers.

For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

Contacts

Fitch Ratings
Primary Analyst
Timothy McNally
Associate Director
+1 212-908-0870
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Committee Chairperson
Du Trieu
Senior Director
+1 312-368-2091
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Timothy McNally
Associate Director
+1 212-908-0870
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Committee Chairperson
Du Trieu
Senior Director
+1 312-368-2091
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com