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Fitch: SDART 2013-5 - No Impact on Ratings from Principal Payment Error on A-2 Notes

June 16, 2014

NEW DELHI & MUMBAI, India & SINGAPORE--(BUSINESS WIRE)-- Santander Consumer USA Inc. (SCUSA) notified Fitch Ratings that the company became aware of an error in the payment and distribution of principal on the outstanding class A-2-A and A-2-B notes in the April and May payment periods, issued by Santander Drive Auto Receivables Trust 2013-5 (2013-5).

SCUSA corrected these errors today by making a capital contribution of $71.25 million to 2013-5, distributed to the class A-2-B notes to bring these notes to parity with the class A-2-A note balance. Fitch expects no impact on the performance of the transaction with this capital contribution, and this error and subsequent corrective action by SCUSA will not affect any of the outstanding ratings as listed below.

Under the priority of payments, after payment in full of the class A-1 notes which occurred in the April 2014 payment date, the class A-2-A and class A-2-B notes are to be paid principal ratably until paid in full. However, due to a servicing error by SCUSA, principal payments were instead made solely to the class A-2-A notes on the April and May payment dates. This error resulted in an accelerated payment of principal to the class A-2-A notes, and delayed payment of principal to the class A-2-B notes.

Of the $71.25 million capital contribution to the class A-2-B notes, $26.25 million was distributed for the March collection period/April payment period, and $45.0 million for the April collection period/May payment period. Further, interest of $7,001 was distributed to the class A-2-A and $22,675 to the class A-2-B notes, for lost interest payments during the periods mentioned above. The 2013-5 transaction documents were amended accordingly to enable such capital contributions to be made by SCUSA to 2013-5.

Additionally, the capital contribution increased the targeted overcollateralization (OC) amount to 19.98% from the initial OC target of 15.0%, resulting in an addition of 4.98% credit enhancement (CE) to all outstanding notes (class A, B, C, D and E notes) providing further protection against future losses. Total hard CE for the class A notes is currently 63.91%, up from 45.80% at closing.

The transaction is currently at an 84.3% pool factor through seven months, and to date is performing below Fitch's initial cumulative net loss (CNL) proxy of 16.60%. Through the May collection period, CNL were at 0.89% since closing in November last year.

Further, SCUSA will be implementing additional processes and will enhance controls to ensure future payment distributions will accurately reflect the legal documentation and transaction structure going forward. Fitch will review these intended changes and continue to closely monitor the performance and servicing of the transaction.

SDART 2013-5 Outstanding Ratings:

Class A-2-A notes: 'AAAsf' Outlook Stable

Class A-2-B notes: 'AAAsf' Outlook Stable

Class A-3 notes: 'AAAsf' Outlook Stable

Class A-4 notes: 'AAAsf' Outlook Stable

Class B notes: 'AAsf' Outlook Stable

Class C notes: 'Asf' Outlook Stable

Class D notes: 'BBBsf' Outlook Stable

Class E notes: 'BBsf' Outlook Stable


Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'U.S. Auto Loan ABS Rating Criteria' (April 2014); and

--'Global Structured Finance Rating Criteria'(May 2014).

Applicable Criteria and Related Research:

Rating Criteria for U.S. Auto Loan ABS - Effective April 10, 2013 to April 7, 2014

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704137

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Hylton Heard

Senior Director

Fitch Ratings, Inc.

212-908-0214

33 Whitehall Street

New York, NY 10004

or

Surveillance Analyst

Khadija Mediouri

Analyst

212-908-0109

or

Media Relations

Sandro Scenga, New York, +1-212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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