Westlake Financial Services is prepping its second securitization of the year, backed by $550 million of subprime auto loan receivables, according to a presale report from Standard & Poor’s Ratings Services, and the Westlake Automobile Receivables Trust 2016-2 shows a “negative shift” from Westlake 2016-1.
While the weighted average Fico score only increased to 604 from 601, the percentage of loans with a Fico of more than 660 decreased to 14% from 15%, according to the report. The percentage of loans with an original term of 61 to 72 months increased to 26% from 22%, and the weighted average loan-to-value decreased to 112% from 114%.
“Due to a weaker pool composition and higher expected loss on the company’s loan programs than the series 2016-1 pool, along with deterioration in performance of the static pool and managed pool performance, we are increasing our expected cumulative net loss range for this transaction to 12.00%-12.50% from 11.50%-12.00%,” S&P wrote.
Westlake’s managed portfolio performance was “mixed” in 2015, according to the report. Delinquencies were up slightly to 5.4%, while losses declined. However, the increase is attributed to losses “reverting back to more normalized levels, compared with the lows in 2010 and 2011,” S&P said.
Separately, Westlake is making several plays to enhance the consumer buying experience and speed funding. The lender recently announced its plans to invest in an automated originations system in an expanded effort to be more compliant, the company’s President Ian Anderson previously said. Los Angeles-based Westlake Financial Services also partnered with RouteOne in February to offer an e-contracting program to its dealer partners.