Volkswagen upsized its auto lease securitization to $1.45 billion from $1 billion and priced the notes, according to a pricing document.
Fitch Ratings assigned preliminary ratings to four classes of notes to be issued by Volkswagen Auto Lease Trust 2015-A. The issuer paid a yield of .25% on $241 million of F1’ rated money market notes. At the AAA’ level, $225 million of 1.20 year, class A2 notes priced at 32 basis points over the Eurodollar synthetic forward, $447 million of 1.20 year class A2B priced at 32 basis points over one month Libor notes.
The 2-year, A3 notes priced at 37 basis points over interpolated swaps and the 2.45 year class A4 notes priced at 42 basis points over interpolated swaps. All the senior bonds benefit from credit enhancement of 15.75%.
The notes are backed by a pool of $1.18 billion of closed-end vehicle leases, all of which are secured by new Volkswagen and Audi brand vehicles manufactured by Volkswagen and originated through Volkswagen Credit, which will also act as the servicer.
Barclays is the lead underwriter.
Hyundai is preparing to launch $964 million of securities backed by auto lease receivables. The transcation, called Hyundai Auto Lease Securitization Trust 2015-A, will be rated by Fitch. The trust offers three tranches of AAA’ rated notes. The $317 million, class A2 notes are due October 2017, the $350 million class A3 notes are due September 2018 and the $$75 million class A4 notes are due August 2019. The issuer plans to sell $187.7 million of short dated money market notes. All of the snior bond benefit from credit enhancement of 16.95%.
At the subordinate level, $38.25 million of AA’ notes are on offer that are due November 2019 and benefit from credit enhancement of 13.5%.
The pool is consistent with recently issued Hyundai auto lease ABS transactions, with a weighted average FICO score of 742 and seasoning of nine months.
Bank of America Merrill Lynch is the lead underwriter.
Among the risks cited in the presale report is Fitch’s expectation that used car prices could level off or even weaken this year after rising for several years. This could reduce the value of vehicles coming off lease. The rating agency said this would likely lead to “moderately higher” loss rates. “Fitch’s analysis accounts for this risk by including periods of weak wholesale vehicle market performance in the derivation of residual and credit loss expectations,” the report states.