First Investors’ is readying its second subprime auto loan securitization of the year, according to a presale report published by Kroll Bond Rating Agency.
The transaction, $225 million First Investors Auto Owner Trust 2014-2, will be backed by a total of 9,209 contracts on new (26.98%) and used (73.02%) vehicles. The pool has a weighted average FICO score of 582—consistent with First Investors’ last issuance—and weighted average seasoning of two months.
Six tranches of notes will be offered. The $32.9 million class A-1 notes, maturing August 2015, were preliminarily rated K1+’ by Kroll. The $90 million class A-2 notes, maturing August 2018, and the $60.92 million class A-3 notes, maturing in June 2020, were assigned AAA’ provisional status. All class A notes benefit from an initial credit enhancement of 19.80%.
This will be First Investors’ 14th transaction overall.
The company’s last deal, $220 million First Investors’ Auto Owner Trust 2014-1, was issued in April. The transaction is backed by subprime auto loan receivables and consists of six tranches of notes as well. Standard & Poor’s assigned the $31 million class A-1 notes, maturing in April 2015, A-1+’ ratings. The $85 million class A-2 notes that mature in February 2018 and $63 million class A-3 notes, maturing in January 2020, were rated AAA.’
First Investors is an independent consumer finance company that purchases dealer-originated auto loans from the sale of new and used vehicles (indirect auto loans) and makes auto loans directly to consumers to refinance an existing auto loan (direct auto loans).
FIAOT 2014-2 contains a lower portion of loans originated by the direct program than the April issuance—35.56% compared with 38.42%. Direct loans have historically performed better than indirect loans.