Finance

Proceeds could be used to support the company's loan originations as well pay down existing debt coming due in the next three years.

Westgate will repay principal on a pro rata basis, if there are no performance-related trigger events. Should a performance-based trigger event happen, the transaction will switch to a sequential-pay structure.

Initially, the reserve account starts at 0.0%, but it will be funded to either 1.00%, 2.00% or 3.00%, depending on the level of the notes' three-month average excess spread.

The pool includes loans originated under section 504 of the Small Business Investment Act of 1958, which supported funding for loans made to small business concerns, predominantly with original 30-year terms.

The trust will repay on a pro rata basis each month until the collateral's aggregate principal value is 50% of the aggregate principal value of the collateral obligations at closing.

Some buyers in the JPMorgan deal — and in multiple other SRT trades — borrowed money from other banks to help finance their stakes and inflate returns, people familiar with the matter say.

Although used cars with borrowers of non-prime credit quality comprise the asset pool, it benefits from 9.00% in overcollateralization, subordination, a reserve account representing 1.00% of the pool balance, and excess spread.

The A5 through A21 notes have credit enhancement levels amounting to 15.00%, while the rest of the notes are covered by levels ranging from 8.65% to 0.55%.

The $39 billion 10-year note sale was awarded at 4.438%, compared with a yield of 4.458% in pre-auction trading at 1 p.m. New York time, the bidding deadline.

Class A notes benefit from total hard credit enhancement equal to about 31.50% of the portfolio balance, while enhancement levels range from 23.75% on the class B notes to 2.00% on the class G notes.