Morningstar DBRS assigns provisional ratings for Bridgecrest auto securitization

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Morningstar DBRS Bridgecrest ratings

Highlights

Morningstar DBRS assigned provisional ratings to seven classes of BLAST 2026-3 notes, with $79.86 million Class A-1 (P) R-1 (high) (sf) and total base issuance up to $579.78 million.
The deal's credit enhancement—overcollateralization, subordination, reserve funds, and excess spread—supports a 28.20% cumulative net loss assumption under stressed scenarios, with potential upsizing to $725 million if market conditions allow.
DriveTime and Bridgecrest are deemed acceptable subprime auto loan servicers due to performance stability and technology investments, while Computershare acts as standby servicer and legal structure meets Morningstar DBRS U.S. structured finance standards.

Deal structure and rating rationale

As reported by Morningstar DBRS, the agency assigned provisional credit ratings to seven classes of notes to be issued by Bridgecrest Lending Auto Securitization Trust 2026-3, or BLAST 2026-3. The base issuance includes $79.86 million of Class A-1 notes rated (P) R-1 (high) (sf), $111.49 million each of Class A-2 and Class A-3 notes rated (P) AAA (sf), $68.88 million of Class B notes rated (P) AA (sf), $88.05 million of Class C notes rated (P) A (sf), $88.76 million of Class D notes rated (P) BBB (sf), and $51.74 million of Class E notes rated (P) BB (sf).

Morningstar DBRS says its review focuses on the transaction's capital structure, the form and sufficiency of credit enhancement, and the ability of the securitization to withstand stressed cash flow assumptions while repaying investors under the terms of the notes. Credit enhancement comes from overcollateralization, subordination, reserve fund amounts, and any excess spread, which the agency considers sufficient to support its projected cumulative net loss assumptions under multiple stress scenarios.

The agency says BLAST 2026-3 provides coverage multiples that are slightly below its usual range for this asset class, but it considers that acceptable because of the expected loss profile, company history, and structural features of the transaction. It sets a cumulative net loss assumption of 28.20% for both the base and upsize pools. If market conditions support an upsize transaction, total issuance may rise to $725 million, with each note class increasing proportionally from the base structure.

Servicing capabilities and market implications

The transaction assumptions also incorporate Morningstar DBRS' baseline macroeconomic scenarios for rated sovereign economies from its June 25, 2026 update. Those scenarios replace the agency's earlier moderate and adverse COVID-19 pandemic scenarios first published in April 2020.

Morningstar DBRS says DriveTime has an experienced and stable management team and has shown relatively stable performance across different economic environments because of its subprime auto market expertise. The agency says it completed an operational review of DriveTime and Bridgecrest and considers them acceptable originators and servicers of subprime auto loans, while it did not perform an operational review of GoFi because of its contribution level to the pool.

The rating rationale also cites DriveTime's investments in technology and infrastructure to improve borrower behavior forecasting, risk management, and loss mitigation, along with centrally maintained underwriting and servicing platforms. Computershare serves as standby servicer for the portfolio, while the legal structure is expected to include opinions covering true sale, non-consolidation of the special-purpose vehicle, and a valid first-priority security interest in the assets, in line with Morningstar DBRS criteria for U.S. structured finance.

Our earlier article on Veros Auto Receivables Trust 2026-2 outlined Veros Credit LLC’s second term auto loan ABS deal of 2026, a $235.20 million issuance backed by indirectly originated receivables, largely sourced through independent auto dealers. We noted the preliminary ratings across six note classes and the key review focus on collateral performance data, stressed cash-flow assumptions, and transaction legal documentation ahead of closing.

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