In its securitization debut, Bank of the West plans to offer $750 million of bonds backed by a pool of prime retail auto loans, according to Moody’s Investors Service.
The bank is chartered in California and headquartered in San Francisco with $69 billion in assets. It is a subsidiary of BNP Paribas, which is also the lead undewriter on the deal.
Although the deal is Bank of the West’s first securitization, the issuer has experience in auto lending dating back to the 1960's and has had a primary focus on the prime segment of borrowers.
The BWSTA 2014-1 pool is comprised of loans with a weighted average FICO of 777, which is among the highest of outstanding auto loan trusts.
However the pool includes more longer-term loans than other prime auto loan deals that Moody’s has recently rated: more than 22% of its total receivables balance have original terms of 79-84 months. “Longer-term loans carry risks stemming from their slower amortization schedules that lead to substantial negative equity for the borrower and a prolonged period where the loan is exposed to macro- economic factors that can lead to credit loss,” stated Moody’s in the presale report.
On offer are $220 million of Aaa’ rated securities due July 2017; $220 million of Aaa’ rated notes that are due in March 2019 and $80.7 million of Aaa’ rated notes due in March 2020.
Also up for grabs are $12 million of A1’ rated class C note, due July 2020 and $11.6 million of Baa2’ class D notes, due April 2022.