BBVA, Popular Securitizing €1.89B in Consumer Loans

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Two of Spain’s most prominent banks have structured new consumer-loan securitizations totaling nearly €1.89 billion (US$2.05 billion) in new bonds.

Moody’s Investors Service has assigned a definitive ‘A3’ ratings to a senior class of Series A fixed-rate notes totaling €1.251 billion (US$1.36 billion) supported by a portfolio of revolving consumer-loan accounts managed by €750 billion-asset Banco Bilbao Vizcaya Argentaria (BBVA), the country’s second-largest institution.

The BBVA Consumo 9, FT transaction also includes subordinate Series B tranche totaling €123.8 million (US$134.46 million) that were not rated.

In a presale report published last week, Moody’s noted the Series A notes carried 13.5% credit enhancement.

The notes are backed by a provisional portfolio of €1.424 billion (US $1.55 million) in in outstanding balances on 169,230 loans, which include a mix of revolving accounts as well as more than 21% of the contracts that were used in vehicle purchases.

Moody’s noted a particular strength of the portfolio was a high excess spread level of 6.97% in the initial portfolio, and the pool eligibility criteria that will keep the minimum yield at 5.5% for the life of the transaction.

Moody’s assigned an expected portfolio default rate of 6.75%, recoveries of 20%.

Meanwhile, Banco Popular Español – the country’s fourth-largest banking group with €195 billion in assets – is marketing Euro-denominated bonds backed by a portfolio of €510 million (US$553 million) in consumer loan contracts.

Moody's assigned a prelimary 'A2' rating and DBRS has assigned a provisional ‘A’ rating to the €423 million senior Series A notes of IM GBP Consumo I, FT, the bank's first-ever securitization in its home country. The €86.7 million Series B notes were rated 'Caa2' by Moody's and 'CC' by DBRS.

The bonds are supported by fixed- and floating-rate loans that were originated and are serviced by Banco Popular and Banco Pastor, which Popular has owned since 2011 but runs as a separate institution.

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