Exeter ‘Upsizes’ Latest Securitization

Exeter Finance Corp. has come to market for the second time this year with a $550 million securitization — EART 2015-2 — backed by subprime automobile loan receivables, according to a presale report from Standard and Poor’s.

The issuance, originally rated by S&P on May 7, has since been “upsized” from $450 million, according to a press release from Exeter.

“Exeter is pleased to have executed its second auto loan securitization this year,” Andrew Kang, senior vice president and treasurer said in the release. “This transaction was met with strong investor demand and demonstrated significant oversubscription levels, which allowed Exeter to upsize the transaction from $450 million to $550 million while improving overall pricing,” said Kang.

The 2015-2 trust has a weighted average Fico of 569, up only slightly from the previous 2015-1 trust’s 567. S&P expects the 2015-2 transaction to experience losses of 17.50% to 18.50%.

In 2014, Exeter transitioned to a fully centralized and automated originations platform, which was part of an overhaul of Exeter’s corporate structure to a centralized model — from the branch network upon which the company was founded back in 2006. Exeter co-founders Richard Frunzi and Kenneth Wardle, executive vice presidents in charge of originations and portfolio management, respectively, also left the company last year, as a result of the strategy change.

Exeter’s portfolio increased approximately 41% to $3.13 billion as of March 31, 2015, up from $2.22 billion at the same time a year prior, according to the report.