CIG Financial is marketing its first ever public term auto loan securitization, according to DBRS.
The auto lender plans to offer $146.7 million of securities that are backed by subprime auto loans.
CIG has focused on indirect lending since 2000. It generates retail automobile contracts through a network of franchise and independent dealerships across various states. CIG has relationships with over 1,800 dealers. As of December 2015, originated loans from independent dealers represent more than 90% of all originations.
Its first public securitization, called CIG Auto Receivables Trust 2016-1 will offer $130 million of ‘A’ rated class A bonds; $9.7 million of ‘BBB’ rated class B bonds; and $6.7 million of ‘BB’ rated class C bonds.
The class A notes benefit from 14.5% credit enhancement; the class B notes benefit from 8% credit enhancement and the class C notes benefit from 3.5% credit enhancement.
The loans in the collateral pool have a weighted average original term of 53 months and weighted average seasoning of 14 months. The loans on average pay an interest rated of 18.55%.
CIG has completed two private term securitizations, the first in April 2013 and the second in September 2014.