BMW Financial Services is marketing a $1 billion securitization of auto leases, the sponsor's second lease deal of the year, according to Fitch Ratings.
The collateral backing BMW Vehicle Lease Trust 2015-2 consists of 31,337 leases with a weighted average (WA) FICO of 776 and a WA original term of 35.76 months. The leases have, on average, paid 10 months of installments, which leaves them with a WA remaining term of 25 months.
Fitch said in the presale report that the length of the remaining term exposes the deal to the risk that auto prices may fall, lowering the residual value of cars when they come off lease. The rating agency remains concerned about the impact of rising volumes of U.S. off-lease vehicle inventory on the wholesale market. "Furthermore, 88% of the portfolio residual cash flows are set to come due in 2017 and beyond, a difficult time in the used vehicle market to predict" the presale report states.
Fitch assigned preliminary 'F1+' ratings to the money market tranche and 'AAA' ratings to the four tranches of class A notes. The floating-rate and fixed-rate class A2 note are due January 2018; the class A3 notes are due September 2018 and the class A4 notes are due February 2019. All of the notes are structured with 17.05% credit enhancement.
Credit Suisse Securities is the lead underwriter.
BMW was most recently in the markt in January with BMW Vehicle Lease Trust 2015-1.