Avis Budget Car Rental and American Honda Finance Corp. added $1.6 billion to the pipeline of auto-related asset backed securities Tuesday.

Avis plans to sell $600 million of bonds backed by rental car and lease payments.

Lord Securities is managing the deal and will also serve as the back up administrator in the deal, issued as part of the Avis Budget Rental Car Funding Series.

On offer are $494 million of senior notes with a preliminary 'AAA' rating from DBRS, $73.8 million of ‘A’ rated notes and $32 million of ‘BBB’ rated notes.

Like the issuer’s last two deals, both issued in 2014, the 2015-1 series includes leases from the Avis Budget and its subsidiaries, Zipcar and Payless Car Rental System. Avis is a leading rental car supplier to the premium commercial and leisure segments of the travel industry and Budget is a leading rental car supplier to the price-conscious segments of the industry. Avis Budget Group acquired Payless Car Rental, the sixth-largest car rental company in North America, in 2013 for $500 million.

As of September 30, 2014, Avis had approximately $2.54 billion in vehicle rental revenue, up from roughly $2.40 billion at the same point in 2013; the increase was driven by strong demand and pricing trends with a 6% increase in rental days and a 2% increase in pricing, according to the DBRS presale report. At the end of the second quarter of 2014, it had $4.3 billion of available liquidity, including a cash balance of $713 million.

Honda is marketing $1 billion of notes backed by prime retail auto loans. Honda Auto Receivables 2015-1 will issue a $279 million money market tranche and three classes of fixed-rate notes with a preliminary ‘AAA’ rating from Standard & Poor's.

Merrill Lynch, Pierce, Fenner & Smith, Citigroup Global Markets, and Mizuho Securities USA are the underwriters.

The credit enhancement structure is unchanged from the series 2014-4 transaction except that the estimated excess spread per year increased to approximately 2.32% from 2.26%, according to S&P, and the collateral composition has changed “minimally.” The pool has with a weighted average FICO score of 758, up from 757 in the previous transaction, and the percentage of loans with original terms of 61-72 months increased to 14.26% from 14.16%. The percentage of loans backed by new vehicles also increased minimally to 91.2% from 90.6%.

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