Subprime-Auto Deals Show Muted Impact From Tricolor’s Collapse

Two subprime auto lenders sold asset-backed bonds this week and risk premiums widened only slightly on other previously issued securities, suggesting that there’s been limited fallout on the broader market from the collapse of Tricolor Holdings.

Santander’s Drive Auto Receivables Trust sold $1.6 billion of securities backed by subprime auto loans on Tuesday and increased the sale over the $1.1 billion that was initially planned. Online auto retailer CarMax sold $900 million of bonds backed by similar loans, a deal that whose size was also increased. Both sold at yields that were closer to the risk-free benchmark than those from the companies earlier this year.