BMW Vehicle Lease Trust is preparing to issue $1 billion in asset-backed bonds, with proceeds from prime auto lease receivables service as collateral.
BMW Financial Services is the sponsor on the deal, which the Asset Securitization Report's deal database expects to close on February 14. Moody's Investors Service notes that the securitized amount could be upsized to $1.3 billion.
Barclays, Citigroup Global Markets and Mizuho Securities will act as managers on the deal, according to ASR's database.
S&P Global Ratings also assigned ratings to the notes in the deal, known as BMWLT 2024-1, and it noted several differences. While the BMWLT 2023-3 notes were all fixed rate, the 2024-1 deal features a potential floating-rate tranche, the A2B, which is expected to notes benchmarked to the 30-day compounded Secured Overnight Financing Rate (SOFR). S&P also noted that the securitization discount rate decreased to 11.40%, from 12.10% on the previous deal.
The notes benefit from total initial hard credit enhancement of 13.40%, initial overcollateralization levels of 13.15% of the initial pool balance and an initial reserve account representing 0.25% of the pool balance at closing, according to Moody's. The trust will issue notes through five tranches, the A1, A2A, A2B, A3 and A4 notes, which have legal final maturity dates of Feb. 25, 2025, July 27, 2026, July 27, 2026, March 25, 2027 and June 25, 2027, respectively.
Moody's noted that in terms of the underlying pool's credit quality, the loans have a weighted average FICO score of 798, higher than previous BMWLT that Moody's has rated.
Moody's intends to assign ratings of P-1 to the A1 notes and Aaa to the A2 through A4 notes. S&P meanwhile, plans similar ratings, of A1+ to the A1 notes and AAA to the A2 through A4 notes.
