Ratings Assigned To Auto ABS Transaction Driver UK Master, Compartment 3 Series 2016-1

Stocks and Financial Services Press Releases Friday May 25, 2018 17:16
LONDON--25 May--S&P Global Ratings

LONDON (S&P Global Ratings) May 25, 2018--S&P Global Ratings today assigned its credit ratings to Driver UK Master S.A., Compartment 3's series 2016-1 class A and B notes. At closing, the issuer issued an unrated subordinated loan (see list below).

This transaction originally closed in September 2016. However, this is the first time we are rating the transaction.

At closing (in 2016), Driver UK Master used the rated notes' issuance proceeds, as well as an unrated subordinated loan, to purchase a portfolio of auto loans that Volkswagen Financial Services (UK) Ltd. (VWFS UK) originated for its customers in England, Scotland, Wales, and Northern Ireland.

On the May 2018 payment date, Driver UK Master, Compartment 3 issued further advances for the outstanding class A notes for a total net increase amount of GBP16 million. At the same time, the subordinated loan was also increased in size.

Following the further advance of the series 2016 class A notes and additional subordinated loan, the total outstanding issuance for the class A notes is GBP401 million, GBP55 million for the class B notes, and GBP105.4 million for the subordinated loan. The balance of the class B notes is unchanged from closing. Further issuance of class A and B notes, either by further amounts of existing series or issuing new series, up to the maximum issuance amount (GBP2 billion) will rank pari passu with the initially issued notes and will have the same levels of credit enhancement and liquidity support.

As part of the further advance of the series 2016 class A notes and the increase to the subordinated loan, the transaction structure was also amended, including the modification of the notes' interest rate to a floating rate from a fixed rate. In light of this amendment, a fixed-float swap was also added to the transaction structure to hedged against the fixed rate payable on the assets and the floating rate payable on the notes.

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