American Heritage Auto Receivables Trust is preparing to sell $303 million in asset-backed securities (ABS) backed by prime quality motor vehicle loans, in its first ABS issuance.
A pool of new and used automobiles, mainly vans, sport utility vehicles and light duty trucks, will secure the notes. American Heritage Auto Receivables Trust, or AHART 2024-1, to be sold to investors through seven tranches of A, B, C and D classes, according to analysts at Moody's Ratings and S&P Global Ratings.
The AHART 2024-1 will issue all fixed-rate notes, and legal final maturity dates on the A1, A2, A3, A4, B, C and D notes are Nov. 17, 2025, March 15, 2028, Sept. 17, 2029, June 17, 2030, Sept. 16, 2030, Dec. 16, 2030 and Jan. 18, 2033, according to the rating agencies.
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Although this is American Heritage Federal Credit Union's first securitization deal, the lender has been providing a range of loan products since 1948. That record gives American Heritage a longstanding origination and servicing history and provides a boost to the notes credit, Moody's said.
All AHART 2024-1's assets are backed by a pool of prime-quality auto loans and retail installment sales contracts, which the lender originated either directly or through relationships with franchised motor dealer channels.
When the deal closes, Moody's says, AHART 2024-1's class A, B, C, and D notes will benefit from initial hard credit enhancement of 9.20%, 6.30%, 3.40% and 1.25%, respectively. That credit enhancement consists of overcollateralization and yield supplement OC, subordination and excess spread. There is also a reserve account representing 0.25% of the assets, according to Moody's.
As the notes repay investors sequentially non-declining credit enhancement, as a percentage of the remaining assets, will grow in the deal.
Moody's assigns P1 to the A1 notes; Aaa to the A2 through A4 notes; Aa1 to the class B notes; A1 to the class C notes and Baa2 to the class D notes.
S&P Global Ratings also assessed the notes, assigning A1+ to the A1 tranche; AAA to the A2 through A4 tranches; AA to the class B notes; A to the class C notes and BBB to the class D notes.
