DBRS Assigns Ratings to OneMain Direct Auto Receivables Trust 2017-1

DBRS, Inc. (DBRS) has today assigned ratings to the following classes issued by OneMain Direct Auto Receivables Trust 2017-1:

-- $209,950,000 Class A at AA (high) (sf)
-- $26,990,000 Class B at AA (sf)
-- $18,000,000 Class C at A (sf)
-- $26,990,000 Class D at BBB (low) (sf)
-- $18,000,000 Class E at BB (sf)

The ratings are based on DBRS’s review of the following analytical considerations:
-- Transaction capital structure, proposed ratings and form and sufficiency of available credit enhancement.
-- The ability of the transaction to withstand stressed cash flow assumptions and repay investors according to the terms under which they have invested. For this transaction, the ratings address the payment of timely interest on a monthly basis and principal by the legal final maturity date.
-- Springleaf Finance Corporation’s (Springleaf) capabilities with regards to originations, underwriting and servicing.
-- Receivables are generated through legacy Springleaf branches. Cash and check payments are received at these branches. In a decentralized operation, this can introduce risks that are hard to quantify. For this transaction, however, rating levels have increased for the Class A Notes compared with those issued in the 2016-1 transaction.
-- Acquisition of OneMain by Springleaf Holdings, Inc. (now known as OneMain Holdings, Inc.)
-- The Company began lending this product type, Direct Auto, in 2014, so DBRS used a proxy analysis in its development of an expected loss since a limited amount of performance data was available for the Company’s direct auto originations.
-- The legal structure and presence of legal opinions that address the true sale of the assets to the Issuer, the non-consolidation of the special-purpose vehicle with Springleaf, that the trust has a valid first-priority security interest in the assets and is consistent with DBRS’s “Legal Criteria for U.S. Structured Finance” methodology.

The OneMain Direct Auto Receivables Trust 2017-1 transaction represents the second securitization of a portfolio of direct auto loans originated through Springleaf’s branch network.

The rating on the Class A Notes reflects the 31.00% of initial hard credit enhancement provided by the subordinated notes in the pool and the Reserve Account (1.00%). The ratings on the Class B, Class C, Class D and Class E Notes reflect 22.00%, 16.00%, 7.00% and 1.00% of initial hard credit enhancement, respectively. Additional credit support may be provided from excess spread available in the structure.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is Rating U.S. Retail Auto Loan Securitizations, which can be found on our website under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

Please see attached appendix for additional information regarding sensitivity of assumptions used in the rating process.