Avis Budget Rental Car Funding (AESOP) is getting ready to sponsor twin securitizations of revolving pools of program and risk vehicles from original equipment manufacturers leased to Avis Budget Car Rental, raising $276.24 million for each deal.
Both transactions, AESOP 2023-1 and 2023-2 extend the use of a structure that had been in place for the 2022-5 deal, in which the concentration limits for used vehicles and net present value (NPV) will be removed. The transactions also increased the original equipment manufacturer (OEM) limits for Tesla, according to pre-sale reports from Avis Budget Rental Car Funding, 2023-1 and 2023-2.
Aside from these changes, Fitch found that the fleet of cars and light trucks is very diverse, due to the high degree of OEMs, model types, vehicle segments and geographical diversification.
Each deal also has a range of sub lessees, including Avis Rent a Car System, Payless Car Rental and Zipcar, according to Fitch.
As for the main car manufacturers in the deal, AESOP 2023-1 and 2023-2 have identical amounts of the top five makers in the deal, including Toyota, Chrysler, GM, Ford and Kia, which have concentrations of 22.5%, 16.1%, 15.4%, 15.0%, and 8.2%, respectively.
Barclays Capital is the structural lead on both transactions, which are practically the same in most ways, according to Fitch. Both will issue notes through three tranches. In both deals, classes A, B and C will issue $216.85 million, $33.15 million, and $26.24 million in notes, respectively.
As for credit enhancement, both transactions utilize subordination, letters of credit from JPMorgan Chase, and dynamic overcollateralization, according to the rating agency. The credit enhancement levels are almost identical across the structures of both transactions, too.
AESOP 2023-1 has a revolving period of five years, while AESOP 2023-2's revolving period is three, according to Fitch.
In both cases, Fitch expects to assign ratings of 'AAA,' 'A' and BBB-' on classes A, B and C, respectfully.
On series 2023-1 the notes have a legal final maturity of April 2029, while the series 2023-2 have a legal final maturity of October 2027, according to Fitch.
