DBRS Morningstar Assigns Provisional Ratings to DT Auto Owner Trust 2020-1

DBRS, Inc. (DBRS Morningstar) assigned provisional ratings to the following classes of Notes to be issued by DT Auto Owner Trust 2020-1 (DTAOT 2020-1 or the Issuer):

-- $203,750,000 Class A Notes at AAA (sf)
-- $52,500,000 Class B Notes at AA (sf)
-- $75,000,000 Class C Notes at A (sf)
-- $67,500,000 Class D Notes at BBB (sf)
-- $34,250,000 Class E Notes at BB (sf)

The provisional ratings are based on DBRS Morningstar’s review of the following analytical considerations:
-- Transaction capital structure, proposed ratings, and form and sufficiency of available credit enhancement.
-- DTAOT 2020-1 provides for Class A, B, C, D, and E coverage multiples slightly below the DBRS Morningstar range of multiples set forth in the criteria for this asset class. DBRS Morningstar 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 the provided historical static pool data for DriveTime Automotive Group, Inc. (DriveTime) originations and the performance of the DriveTime auto loan portfolio.
-- The legal structure and presence of legal opinions that 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 consistency with DBRS Morningstar’s “Legal Criteria for U.S. Structured Finance.”

The DTAOT 2020-1 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 primarily on the sale and financing of vehicles to the subprime market.

The provisional rating on the Class A Notes reflects 60.75% of initial hard credit enhancement provided by the subordinated Notes in the pool, the Reserve Account (1.50%), and overcollateralization (13.40%). The ratings on the Class B, C, D, and E Notes reflect 50.25%, 35.25%, 21.75%, and 14.90% 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 & Criteria.

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

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

The full report providing additional analytical detail is available by clicking on the link under Related Documents below or by contacting us at [email protected].

For more information on this credit or on this industry, visit www.dbrs.com or contact us at [email protected].

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