Fitch Expects to Rate Santander Drive Auto Receivables Trust 2013-5; Presale Issued

NEW YORK--(BUSINESS WIRE)--Fitch Ratings expects to assign the following ratings to the Santander Drive Auto Receivables Trust (SDART) 2013-5 notes:

--$144,000,000 class A-1 notes 'F1+sf';

--$81,500,000 class A-2A notes 'AAAsf'; Outlook Stable;

--$244,500,000 class A-2B notes 'AAAsf'; Outlook Stable;

--$145,880,000 class A-3 notes 'AAAsf'; Outlook Stable;

--$130,420,000 class B notes 'AAsf'; Outlook Stable;

--$132,060,000 class C notes 'Asf'; Outlook Stable;

--$65,210,000 class D notes 'BBBsf'; Outlook Stable;

--$56,430,000 class E notes 'BBsf'; Outlook Stable.

KEY RATING DRIVERS

Marginally Weaker Credit Quality: The credit quality of 2013-5 is representative of subprime borrowers. While the weighted average (WA) Fair Isaac Corp. (FICO) score (589) and internal loss forecasting score (LFS; 563) are relatively consistent with the prior three transactions, the 2013-5 pool has a higher concentration in the weaker LFS score buckets.

Higher Credit Enhancement (CE): The cash flow distribution is a sequential-pay structure. Initial hard CE totals 45.80% for the class A up from 43% in 2013-4 (not rated by Fitch) and 2013-3, and is higher for the class B, C and D notes, but unchanged for the class E notes. The higher CE in 2013-5 compensates for the marginally weaker pool, lower excess spread, and the incorporation of the unhedged floating-rate class A-2B notes.

Stable Portfolio/Securitization Performance: Delinquencies and losses on SCUSA's portfolio and 2010-2012 securitizations declined from prior years, supported by the improving U.S. economy and healthy used vehicle values elevating recovery rates.

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 Negative Outlook.

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

RATING SENSITIVITY

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 2013-5 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. For both scenarios, the senior tranche notes do not display negative rating sensitivities.

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 [phone] or at '[e-mail]'.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'Rating Criteria for U.S. Auto Loan ABS' (April 10, 2013);

--'Criteria for Interest Rate Stresses in Structured Finance Transactions' (Jan. 25, 2013);

--'Structured Finance Tranche Thickness Metrics' (July 29, 2011).

Applicable Criteria and Related Research: Santander Drive Auto Receivables Trust 2013-5 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=721962

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=704137

Criteria for Interest Rate Stresses in Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=695535

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=807376

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