BMW priced a $1.0 billion securitization of auto leases, according to a person familiar with the deal.
BMW Vehicle Lease Trust (BMWLT) 2014-1 issued three tranches of triple-A notes rated by Moody’s Investors Service and Fitch Ratings. The money-market tranche pays interest of 0.2%.
The 1.05-year class A-2 notes priced at 18 basis points over eurodollar synthetic forward curve (EDSF). The 1.88-year, class A-2 notes priced at 24 basis points over EDSF. The 2.34-year, class A-4 notes priced at 30 basis points over the interpolated swaps curve.
Pricing was in line, or slightly tighter than, an auto lease securitization priced last week by Mercedes Benz Financial Services. That deal, which was upsized to $1.98 billion, had a money market tranche yielding 0.2%, a 1.05-year tranche yielding 18 EDSF plus 18 basis points, a 1.69-year tranche yielding EDSF plus 24 basis points and a 2.08-year tranche yielding swaps plus 32 basis points.
BMWLT 2014-1 is backed by a pool of closed-end vehicle leases, all of which are secured by new vehicles manufactured by BMW. According to presale reports, the pool is consistent with that of BMW’s previous lease securitization in 2013, with a “strong” weighted average FICO score of 765 and seasoning of 10 months.
Initial credit enhancement decreased by 0.50% from the 2013 deal, to 16.75% initially, but that will increase to 19.00% of the initial securitization value. Initial excess spread is expected to be 4.79%, in line with the 2013 deal.
Barclays Capital and JP Morgan are the lead underwriters. Bank of America Merrill Lynch, Deutsche Bank, HSBC and RBS are co-managers on the deal.