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Autos/Equipment Fill ABS Pipeline

This week auto and equipment deals are filling the asset-backed pipeline with deals from Toyota Motor Credit Corp., Enterprise Fleet Management (EFM), CNH Capital America and General Electric Capital Corp (GECC).

Toyota is planning to sell a $1 billion ABS offering called Toyota Auto Receivables 2012-B Owner Trust (TAOT 2012-B), according to Moody's Investors Service.

The rating agency has assigned provisional ratings to the notes as follows: A-1 notes rated 'Prime-1 (sf)'; A-2 notes rated 'Aaa (sf)'; A-3 notes rated 'Aaa (sf)'; A-4 notes rated 'Aaa (sf)'; and B notes rated 'Aa3 (sf).'

Another auto deal comes from Enterprise, which is planning to sell a $600.8 million auto fleet lease ABS called Enterprise Fleet Financing, LLC Series 2012-2 (EFF 2012-2).

A Fitch Ratings presale report on the transaction said that the notes are backed by payments on a pool of open-end and closed-end vehicle fleet lease contracts for cars, light-duty trucks, and other vehicles originated and serviced by EFM.

The offering will be the fourth 144A U.S. term ABS offered by the company. The deal's proceeds will be used for general funding purposes.

According to Fitch, even though the whole collateral pool makes up obligors not rated by any Nationally Recognized Statistical Rating Organization (NRSRO), the firm’s portfolio has seen minimal delinquencies and net losses.

In its analysis of the ABS, the rating agency conservatively assumed a ‘B’ rating for all obligors. Obligor concentrations have slightly dropped versus the EFF 2012-1 transaction, the rating agency pointed out.

The top 20 obligors by lease balance make up 7.04% as opposed to 11.41% in 2012-1. Industry and vehicle concentrations are in line with previous deals, while closed-end lease concentration has risen. Fitch said that roughly 92% of the 2012-2 leases are open-ended. This means that the lessees bear the residual risk.

Meanwhile, in the equipment sector, CNH is set to issue a $752 million of ABS in an offering called CNH Equipment Trust 2012-C (CNH 2012-C) sponsored by CNH Capital America, which is an affiliate of CNH Global, Moody's stated.

The deal is backed by retail installment contracts and loans backed mostly by new and used agricultural equipment. Moody's assigned provisional ratings of 'Prime-1 (sf)' for the $160 million class A-1 notes; 'Aaa (sf)' for the $240 million class A-2 notes; 'Aaa (sf)' for the $240 million class A-3 notes; 'Aaa (sf)' for the $95.13 million class A-4 notes; and $16.9 million class B notes rated 'A2 (sf).'

As ASR previously reported, GECC is planning to issue GE Equipment Midticket LLC Series 2012-1. The $541 million deal will be backed by commercial leases and loans on various types of equipment originated by GECC, Fitch said in a presale report on the offering.

The deal is GECC’s ninth midticket equipment term ABS and the fourth to include indirect originations, the rating agency said.

Although the firm's historical managed portfolio loss performance has been volatile, term ABS backed by similar receivables have generally performed within Fitch’s expectations, particularly the GEEMT 2009-1, 2010-1, and 2011-1 deals.

The offering's collateral composition is in line with 2011-1, the rating agency said. Even though the concentration of better performing core receivables has dropped, offsetting the dip of core collateral is a drop in Vendor Financial Services (VFS) receivables and a rise in the pool's in leases versus loans.

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