Approximately $273 million of asset-backed securities affected
New York, February 02, 2011 -- Moody's has upgraded one tranche and confirmed another from two auto loan
securitizations sponsored by Triad Financial Corporation (Triad).
Triad was acquired by Santander Consumer USA Inc. (Santander) in
October 2009, and the transactions are currently serviced by Santander.
Issuer: Triad Automobile Receivables Trust 2006-C
Cl. A-4, Upgraded to Aaa (sf); previously on
Dec 6, 2010 Baa3 (sf) Placed Under Review for Possible upgrade
Financial Guarantor: Ambac Assurance Corporation Caa2; previously
Confirmed on 11/23/2010
Issuer: Triad Automobile Receivables Trust 2007-A
Cl. A-4, Confirmed at Aa3 (sf); previously on
Dec 6, 2009 Aa3 (sf) Placed Under Review for Possible Upgrade
Financial Guarantor: Assured Guaranty Municipal Corp. (Aa3;
previously Confirmed on 11/12/2009)
The actions are a result of lower lifetime cumulative net loss (CNL) expectations
and build-up in credit enhancement relative to remaining losses
due to the non-declining nature of reserve accounts in the transactions.
All of the affected transactions also benefit from monoline financial
In addition to collateral performance and available credit enhancement,
Moody's views the acquisition and assumption of servicing by Santander
as positive for the outstanding transactions, providing financial
strength and stability to the servicing operations.
Moody's current lifetime CNL expectations (expressed as a percentage of
the original pool balances) for the Triad 2006-C transaction is
18.75%. The pool factor for this transaction is approximately
12% of the original pool balance. Hard credit enhancement
that does not include excess spread of approximately 9% per annum,
for the Cl. A notes as a percentage of the remaining collateral
balance, is approximately 36%.
For the 2007-A transaction, Moody's current lifetime CNL
expectation is 16.25%. The pool factor for this transaction
is approximately 20% of the original pool balance. Hard
credit enhancement, that does not include excess spread of approximately
8% per annum , for the Cl. A notes as a percentage
of the remaining collateral balance, is approximately 23%.
Ratings on the affected notes could be upgraded (where applicable) if
the lifetime CNLs are lower by 10%, or downgraded if the
lifetime CNLs are higher by 10%.
The performance expectations for a given variable indicate Moody's forward-looking
view of the likely range of performance over the medium term. From
time to time, Moody's may, if warranted, change these
expectations. Performance that falls outside the given range may
indicate that the collateral's credit quality is stronger or weaker than
Moody's had anticipated when the related securities ratings were issued.
Even so, a deviation from the expected range will not necessarily
result in a rating action nor does performance within expectations preclude
such actions. The decision to take (or not take) a rating action
is dependent on an assessment of a range of factors including, but
not exclusively, the performance metrics. Primary sources
of assumption uncertainty are the current macroeconomic environment,
in which unemployment continues to rise moderately, and strength
in the used vehicle market. Moody's currently views the used vehicle
market as much stronger now than it was at the end of 2008 when the uncertainty
relating to the economy as well as the future of the U.S auto manufacturers
was significantly greater. Overall, we expect a sluggish
recovery in the U.S. economy, with elevated fiscal
deficits and persistent, high unemployment levels.
The principal methodology used in these securities was "Moody's Approach
to Rating U.S. Auto Loan-Backed Securities" rating
methodology published in June 2007.
Further information on Moody's analysis of this transaction is available
The underlying ratings reflect the intrinsic credit quality of the securities
in the absence of the transactions' guarantees from monoline bond insurers.
The current ratings on the securities are consistent with Moody's practice
of rating insured securities at the higher of the guarantor's insurance
financial strength rating and any underlying rating.
In addition, Moody's publishes a weekly summary of structured finance
credit, ratings and methodologies, available to all registered
users of our website, at www.moodys.com/SFQuickCheck.
Moody's Investors Service did not receive or take into account a
third party due diligence report on the underlying assets or financial
instruments related to the monitoring of this transaction in the past
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, public information and confidential
and proprietary Moody's Investors Service information.
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of maintaining
a credit rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a credit rating is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
Structured Finance Group
Moody's Investors Service
VP - Senior Credit Officer
Structured Finance Group
Moody's FIS Domestic Sales Office - San Francisco CA
Moody's Investors Service
Moody's upgrades Triad subprime auto loan ABS
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