DBRS Assigns Provisional Ratings to DT Auto Owner Trust 2017-2

DBRS, Inc. (DBRS) has today assigned provisional ratings to the following classes of notes issued by DT Auto Owner Trust 2017-2 (DTAOT 2017-2):

-- $193,000,000 Class A at AAA (sf)
-- $57,510,000 Class B at AA (sf)
-- $69,500,000 Class C at A (sf)
-- $67,090,000 Class D at BBB (sf)
-- $55,310,000 Class E at BB (sf)

The provisional 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.
-- DTAOT 2017-2 provides for Class A, B, C, D and E coverage multiples slightly below the DBRS range of multiples set forth in the criteria for this asset class. DBRS believes that this is warranted, given the magnitude of expected loss and structural features of the transaction.
-- The transaction parties’ capabilities with regard to originations, underwriting and servicing.
-- The quality and consistency of provided historical static pool data for DriveTime Automotive Group, Inc. (DriveTime) originations and performance of the DriveTime auto loan portfolio.
-- The November 19, 2014, settlement of the Consumer Financial Protection Bureau inquiry relating to allegedly unfair trade practices.
-- Review of the legal structure and presence of legal opinions (to be provided), which will address the true sale of the assets to the Issuer, the non-consolidation of the special-purpose vehicle with DriveTime, that the trust has a valid first-priority security interest in the assets and the consistency with the DBRS “Legal Criteria for U.S. Structured Finance” methodology.

The DTAOT 2017-2 transaction represents a securitization of a portfolio of motor vehicle retail installment sales contracts originated by DriveTime Car Sales Company, LLC (the Originator). The Originator is a direct, wholly owned subsidiary of DriveTime. DriveTime is a leading used vehicle retailer in the United States that focuses on the sale and financing of vehicles to the subprime market.

The provisional rating on the Class A Note reflects the 66.28% of initial hard credit enhancement provided by the subordinated notes in the pool, the Reserve Account (1.50%) and overcollateralization (19.27%). The ratings on the Class B, C, D and E Notes reflect 55.79%, 43.11%, 30.86% and 20.77% 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 dbrs.com 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 the attached appendix for additional information regarding sensitivity of assumptions used in the rating process.

The full report providing additional analytical detail is available by clicking on the link under Related Research at the right of the screen or by contacting us at info@dbrs.com.