Look for autos to clog the ABS highway next month as close to $4 billion in auto deals will screech down the asphalt in July. Honda's ramping up for a public offering, WFS Financial will have a new bookrunner to sell its sizable transaction, and Toyota's preparing a large deal from its long dormant loan program.
Honda will motor to market with a much larger deal from its Auto Receivables Grantor Trust compared with the last transaction from that vehicle. Expect volume to be close to $1 billion and the curtains to be opened, as the auto lease deal will be offered in the public market this time, according to sources. Honda's last grantor trust transaction was a private $500 million deal that priced in November 1998. Credit Suisse First Boston will manage the sale, which will be split into three tranches and is scheduled for launch in July.
"It'll have more liquidity than the last one," an insider said.
Honda had a looser, "sometime this year" timeframe for issuance until Credit Suisse advised the automaker to come to market well before the unestimable outcomes of Y2K rear at yearend.
July is the month for Irvine, Calif.-based WFS Financial as well. The subprime auto issuer will cruise into the market next month with upwards of $1.3 billion in auto loans readied for sale via new lead manager Bear Stearns. The deal looks to be split into four tranches and will most likely sport a wrap. The last WFS deal was FSA-insured.
Though Bear has ridden shotgun on WFS sorties in the past, this would mark the first time the underwriter will sell the firm's bonds from the driver's seat. WFS has consistently gone with Donaldson, Lufkin & Jenrette since entering the market in 1996. None of the parties involved would comment on the switch.
A source close to WFS said the firm had filed an S-3 with the Securities and Exchange Commission so that it would be prepared to pull the trigger as soon as market conditions firmed up, and that the company was also waiting to see how the numbers from the Consumer Price Index might affect deal execution. The offering is slated for mid-July.
Toyota Motor Credit Corp. is also expected to join July's grand prix of auto finance. The Torrance, Calif.-based auto issuer has planned to securitize close to $1 billion of auto loans via Credit Suisse. The hefty upcoming deal will be split into three tranches.
Though its 1999 shelf filing allows the company to securitize retail- or lease-based receivables, a source close to the situation said the company will stick to retail loans. Toyota will securitize $2.5 billion in loan transactions over two deals for the year, said the source. - SK