Santander Kicks Off 2013 with $1.25 Billion ABS Transaction

Santander Consumer USA is ringing in 2013 with a $1.25 billion securitization of receivables, the first auto ABS issuance of the year.

The transaction is comprised of seven tranches of receivables: $184 million of A-1 notes, $355 million of A-2 notes, $294 million of A-3 notes, $137 million of B notes, $169 million of C notes, $109 million of D notes, and $42.3 million of E notes.

According to the Securities and Exchange Commission’s initial prospectus on the deal, the class E notes will not be publicly offered and will probably be retained by the bank or be privately placed. 

The transaction’s lead underwriters are Citibank and Deutsche Bank, while Barclays Capital, JP Morgan, and RBC Capital will underwrite the class A portion.

The Santander securitization is the first of what’s expected to be another good year for auto ABS. In its structured products outlooks for 2013, Wells Fargo anticipates auto issuance reaching $80 billion by yearend.

Last year, autos accounted for the largest segment of the consumer ABS market, and deals supported by prime auto loans were $45 billion. Analysts expect to see an increase to $50 billion this year following strong consumer demand for new cars.