This week there are three auto deals that have surfaced in the ABS market. The three companies that have brought these deals to the securitization market are Nissan Motor Acceptance Corp. (NMAC), Toyota Motor Credit and Volkswagen.
Nissan's five-tranche auto lease deal called Nissan Auto Lease Trust (NALT) 2011-B is worth $970 million.
The transaction will be backed by a pool of closed-end vehicle leases on new Nissan and Infiniti brand vehicles Nissan Motor Co. According to a presale report on the deal from Fitch Ratings, all the leases were originated through NMAC, which will also be the servicer, and purchased by Nissan-Infiniti LT, a titling trust, directly from different franchised vehicle dealers.
Meanwhile, Volkswagen is also in the market with a $500 million auto dealer floorplan transaction called Volkswagen Credit Auto Master Owner Trust 2011-1 (VWAMOT 2011-1), The offering will be jointly led by Bank of America Merrill Lynch and Royal Bank of Scotland (RBS).
As earlier reported by ASR in a story on Friday, Toyota is in the market with a transaction called Toyota Auto Receivables 2011-B Owner Trust (TAOT 2011-B).
Joint bookrunners on the offering are JPMorgan Securities, Barclays Capital and Citigroup Global Markets.
Co-managers on the automobile ABS are Credit Suisse, Deutsche Bank Securities, Goldman Sachs, Loop Capital Markets, Mitsubishi UFJ Securities, Nomura Securities and RBS.
New Fleet Lease-Backed ABS
Moody's Investors Service said it plans to rate a $500 million fleet lease- backed ABS deal that will be sponsored by PHH Corp.
The rating agency assigned provisional ratings of 'Aaa (sf)', 'Aa2 (sf)' and 'A2 (sf)' to the Class A, Class B and Class C, respectively, of the Chesapeake Funding LLC Series 2011-2 floating rate ABS notes.
The leases were originated in the name of D L Peterson Trust by PHH Arval, an indirect wholly owned subsidiary of PHH. PHH Arval is one of the biggest firms in the fleet leasing/management industry.
According to Moody's, the notes are ultimately backed by a special unit of beneficial interest in a pool of mostly open-end leases and the related vehicles. It is also backed by a special unit of beneficial interest in a pool of fleet receivables.
The credit risk of the corporate lessees is the primary credit consideration for fleet lease transactions, although the equipment type concentrations can be a concern in the event of lessee default because certain types of equipment or vehicles may be expected to have lower recovery rates, Moody's explained.
The 2011-2 offering has modestly looser collateral concentration limits. According to Moody's, the top obligor and top two obligor limits have been increased to 5.50% from 4.75% and to 9.25% from 8.50%, respectively.
The top ten obligor limit has been increased to 31.50% from 30.00%; the limit on alternative vehicle leases (not cars or light trucks) has risen to 35.00% from 31.50%; the limit on medium and heavy-duty truck leases has been increased to 22.50% from 21.50%; the limit on heavy-duty truck leases has been increased to 10.00% from 7.50%; the limit on equipment leases has been increased to 6.00% from 5.00%; and the limit on forklift leases has been increased to 3.00% from 2.00%.
"The changes in equipment type and top obligor concentrations in this case are relatively small," Moody's stated. "Our required break-even recovery rates are much lower than the average recovery rates that have historically been experienced."
In other deal news, Goldman and Citigroup are planning to sell an over $1 billion CMBS transaction. For the complete copy of the Securities and Exchange Commission filing on the deal, please see this link.
Meanwhile, CNH Capital Australia also plans to issue A$350 million in ABS.