S&P downgrades DriveTime

Standard & Poor's said it lowered the long-term counterparty credit rating of DriveTime Automotive Group Inc. and its affiliate DT Acceptance Corp. to B- from B+ and DriveTime's senior unsecured debt rating to CCC+ from B.

The ratings were removed from CreditWatch Negative, where they were placed March 3, and the outlook is negative.

The agency said the downgrade reflects the impact that current market conditions are having on DriveTime's funding profile, asset quality and profitability. Because it currently lacks access to the asset-backed securities markets, DriveTime has to rely on shorter-term revolving warehouse facilities, which S&P views as a weaker form of funding, to support originations. Management was successful in extending and upsizing warehouse and other facilities, but the agency said this was accomplished at a significantly increased cost.

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