CNH Equipment Trust is preparing to issue $1 billion in asset-backed securities (ABS), in the second securitization deal of 2023 sponsored by CNH Industrial Capital America.
The transaction will issue notes through four classes of notes, all of which has total hard credit enhancement of 4.50%, and initial reserves of 2.00%, according to a pre-sale report from Moody's Investors Service. The Asset Securitization Report's deal database notes that the class A1 notes are expected to attain a coupon of 5.6%.
Classes A2, A3 and A4 are expected to have coupons of 5.9%, 5.6% an 5.4%, according the database. All of the notes are benchmarked to the three-month interpolated yield curve, with pricing guidance ranging from 56 to 58 basis points on the A2 notes; 78 to 80 basis points over for the A3 notes and 90 to 92 basis points over on the A4 notes.
Bank of America Merrill Lynch, Mizuho Securities, Rabobank Group and Wells Fargo Securities are managers on the deal, which has a September 27 closing date, according to the ASR database.
Similar to previous CNH trusts, the collateral revenue comes from leases and installment payments on agricultural and construction equipment, which represent 85.3% and 14.6% of the pool, respectively, according to Moody's.
The collateral revenue is supported by 15,301 contracts, which have original terms of about 62 months, and remaining terms of 57 months, the rating agency said.
In addition to the total hard credit enhancement, the notes benefit from a spread account representing 2.00% of the outstanding balance and overcollateralization, according to Moody's.
Fitch expects to assign ratings of 'F1+' to the A1 notes; and 'AAA' to the A2 through A4 notes. Moody's, meanwhile, expects to assign 'P-1' to the A1 notes and 'Aaa' to the rest of the tranches.
The notes have legal final maturities that range from Oct. 15, 2024 through March 17, 2031.
