There’s a string of auto-related securitizations coming to market right now.
Apart from the deals due to close this week — from the likes of Ally, Honda, Nissan & Ford — BMW and Porsche have just motored into the pipeline.
Called BMW Vehicle Owner Trust, the deal originated by BMW Financial Services is for $750 million, according to a pre-sale by Fitch Ratings.
Split into four tranches, the deal is backed by a portfolio of prime loans whose borrowers have a weighted average (WA) FICO score of 760. Fitch has given all the tranches its highest ratings. An A-1 piece for $215 million matures Oct. 27 2014, making it the only short-term tranche; an A-2 piece for $221 million matures Feb. 25, 2016; an A-3 piece for $265 million matures Nov. 25 2017; and an A-4 tranche for $49 million matures April 25 2020.
The average balance of the underlying loans is $22,098, and the seasoning is 12.7 months. Nearly a fifth of the loans are to borrowers living in California.
The class A notes have an initial overcollateralization of 2.5%.
Led by Credit Suisse, the deal is currently slated to close Nov. 6.
Meanwhile, Porsche Financial Services is prepping a deal for $688 million.
Called Porsche Innovative Lease Owner Trust 2013-1, the transaction has the highest ratings from both Fitch and Standard & Poor’s. A short-term A-1 tranche for $124 million matures Nov. 24, 2014; A-2 notes for a total $225 million mature Jan. 22, 2016; an A-3 piece for $265 million matures Aug. 22, 2016; and an A-4 tranche for $74 million matures Oct. 22, 2019.
The lessees in the underlying pool are unusually robust credits, with a weighted average FICO score of 793, while the initial and target credit enhancement levels are, respectively, 15.75% and 17.25%.
There are risks in the deal, however. The vehicle wholesale market, for one, could soften from the very strong position it has enjoyed this year, Fitch said. Nearly 96% of the leases in the pool will mature in 2015 and thereafter.
JP Morgan Securities is leading the Porsche deal, which is scheduled to close Nov. 6.