CarMax Business Services LLC priced its first issue of 2013, an upsized $1.04 billion prime auto asset-backed securities deal called CarMax Auto Owner Trust 2013-1.

The deal was initially sized at $800 million but despite the increase in demand, pricing on the deal softened a bit a bit from spreads on the last prime auto ABS deal to come to market, Hyundai’s Auto Receivables Trust 2013-A.  

CarMax priced its 1.1-year, ‘AAA’ notes at 10 basis points over the eurodollar spot forward benchmark;  the 2.45-year, ‘AAA’ rated notes priced at 13 basis points over interest rate swaps; and the 3.74-year, ‘AAA’ notes priced at 20 basis points.   

Hyundai priced its upsized $1.48 billion, Hyundai Auto Receivables Trust 2013-A $1.31 billion prime auto ABS deal at the end of January.   The 1.15-year, ‘AAA’ notes priced at 8 basis points over the eurodollar spot forward benchmark. The 2.35-year, ‘AAA’ notes priced at 13 basis points over interest rate swaps; and the 3.52-year ‘AAA’ notes priced at 16 basis points.  

The CarMax deal also sold 1.24-year, class B, ‘AA’ notes, priced at 50 basis points; class C, ‘A’ notes, priced at 80 basis points; and class D, ‘BBB’ notes, priced at 125 basis points. JP Morgan, Barclays Capital, RBC Capital Markets are joint leads on the class A, B, C and D notes. Bank of America Merrill Lynch, RBS and Wells Fargo are joint leads on the just the class A notes.

The deal is backed by a pool of receivables consisting of motor vehicle retail installment sale contracts originated by certain affiliates of CarMax Business Services.

Analysts at Wells Fargo said in a report today that investor demand for auto ABS remains strong. “We have been talking to new investors interested in adding ABS to their portfolios,” said analysts. “We believe that this dynamic should prove beneficial to auto issuers, in particular, because of the strong credit and short-maturity profile for most auto ABS.”  





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