DALLAS — Santander Consumer USA is going public.

According to documents filed with the Securities and
Exchange Commission last week, Santander Consumer USA intends to use the net
proceeds received through the $50 million initial public offering for general
corporate purposes.

The SEC documents show the majority owner of Santander
Consumer USA is Banco Santander, the bank based in Madrid, Spain. Funds managed
by Centerbridge Partners, KKR & Co. and Warburg Pincus, own a 25-percent
stake in the finance company, while the remaining 10 percent is owned by chief
executive officer Thomas Dundon.

Last Wednesday's filing continues a pattern of noteworthy
developments associated with Santander Consumer USA during the past 12 months.

Documents posted with the SEC last September showed
Santander Consumer USA entered into an agreement to purchase DriveTime
Automotive Group through a $700 million transaction, a deal that would have
given the finance company a total of 91 dealerships and DriveTime's related
finance company, DT Acceptance.

However, two months later, the deal dissolved. DriveTime officials
sent notice to the SEC and indicated they made the decision about the selling
agreement first reached on Sept. 11 "due to certain unsatisfied conditions to
the closings of the transactions contemplated."

Then in January, reports first surfaced that Chrysler Group
was going to choose Santander Consumer USA to be its in-house finance company.
The relationship eventually did come to be as Chrysler Capital — an entity
designed to provide Chrysler, Jeep, Dodge, Ram Truck, SRT and Fiat customers
with competitive retail purchase and lease financing and provide wholesale
financing and related services to Chrysler Group and Fiat dealers — officially
started operating on May 1.

The SEC filing connected with the IPO shed more light on
what Santander Consumer USA had to do to get Chrysler Capital up and running and
what it needs to accomplish for the domestic OEM.

"In accordance with the terms of the Chrysler agreement, in
May 2013 we paid Chrysler a $150 million upfront, nonrefundable payment, which
will be amortized over 10 years but would be recognized as expense immediately
if the Chrysler agreement is terminated in accordance with its terms,"
Santander Consumer USA officials said.

"As part of the Chrysler agreement, we received limited
exclusivity rights to participate in specified minimum percentages of certain
of Chrysler's financing incentive programs, which include loan rate subvention
and automotive lease residual support subvention," they continued.

"We have committed to certain revenue sharing arrangements,
as well as to considering future revenue sharing opportunities," officials went
on to say. "We will bear the risk of loss on loans originated pursuant to the
Chrysler Agreement, but Chrysler will share in any residual gains and losses in
respect of automotive leases, subject to specific provisions in the Chrysler agreement,
including limitations on our participation in gains and losses.

In addition under the Chrysler agreement, Santander Consumer
USA indicated that Chrysler has the option to acquire, for fair market value,
an equity participation (which may exceed 50 percent) in an operating entity
through which the financial services contemplated by the Chrysler agreement are
offered and provided, through either an equity interest in the new entity or
participation in a joint venture or other similar business relationship or
structure.

Furthermore, Santander Consumer USA said it agreed to
specific transition milestones for its work for Chrysler Capital, including
market penetration rates, approval rates and staffing and service milestones
for the initial year following launch.

"If the transition milestones are not met in the first year,
the agreement will terminate and we will lose the ability to operate as
Chrysler Capital," Santander Consumer USA officials said. "If the transition milestones
are met, the Chrysler agreement will have a 10-year term, subject to early
termination in certain circumstances, including the failure by either party to
comply with certain of their ongoing obligations under the Chrysler agreement."

Santander Consumer USA also mentioned in the IPO filing
other conditions that could allow Chrysler to pull the plug on Chrysler
Capital, including:

—Failing to meet certain performance metrics, including
certain penetration and approval rate targets during the term of the agreement.

—A person other than SHUSA and its affiliates owning 20
percent or more of our common stock and SHUSA owning fewer shares of common
stock than such person.

—Become, control, or become controlled by, an OEM that
competes with Chrysler.

"The loans and leases originated through Chrysler Capital
are expected to provide us with the majority of our projected growth over the
next several years," Santander Consumer USA officials said.

"If we are unable to realize the expected benefits of our
relationship with Chrysler, or if the Chrysler agreement were to terminate, our
ability to generate or grow revenues could be reduced, and we may not be able
to implement our business strategy, which would negatively impact our future
growth," they continued.

Also of note, Santander Consumer USA indicated that it
currently has relationships with more than 14,000 dealerships nationwide, 95
percent of which are franchised stores. The finance company reiterated in the
IPO how critical it is to maintain those bonds with dealers in order to stay
successful.

"Our ability to acquire loans and automotive leases is reliant
on our relationships with automotive dealers. In particular, our automotive
finance operations depend in large part upon our ability to establish and
maintain relationships with reputable automotive dealers that direct customers
to our offices or originate loans at the point-of-sale, which we subsequently
purchase," Santander Consumer USA officials said.

"Although we have relationships with certain automotive
dealers, none of our relationships are exclusive and some of them are newly
established and they may be terminated at any time," officials continued.

"As a result of the recent economic downturn and contraction
of credit to both dealers and their customers, there was an increase in
dealership closures and our existing dealer base experienced decreased sales
and loan volume in the past and may experience decreased sales and loan volume
in the future, which may have an adverse effect on our business, results of
operations, and financial condition," Santander Consumer USA officials went on
to say.

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