CarMax priced its upsized $950 million asset-backed securitization backed by prime auto loans, according to a deal prospectus filed with the Securities and Exchange Commission.
The deal, CarMax Auto Owner Trust 2014-1, was upsized by $150 million. Moody’s Investors Service and Fitch Ratings assigned Aaa’ / AAA’ ratings respectively to the three class A notes marketed to securitization investors.
The class A2 notes with a weighted average maturity of 1.10-years, priced at 19 basis points over the EDSF. The 2.45-years, class A3 notes priced at 20 basis points over the interpolated swaps curve. The 3.72-years, class A4 tranche priced at 25 basis points.
Further down in credit, the double-A rated, 4-year class B notes priced at 50 basis points over the interpolated swaps curve; the single-A, 4-year class C notes priced at 75 basis points; and the triple-B, 4-year class D notes priced at 125 basis points.
The CarMax deal saw some spread widening across the structure when compared to the last prime auto loan securitization to come to market. On Jan 29. Hyundai’s securitization priced the class A notes up to three basis points tighter. The subordinate notes for CarMax deal widened by up to ten basis points.
Bank of America Merrill Lynch, JP Morgan and Wells Fargo are the lead managers of the deal. Barclays, RBC Capital Markets, RBS and Scotiabank are co-managers on the class A notes.
CarMax last issued from its auto owner trust structure in October 2013. In December, the issuer announced that it would it would begin offering subprime auto loans in the fourth quarter of its fiscal 2014.