PHH Corp and Automotive Rentals, Inc. (ARI) are in the market with securitizations of fleet lease backed notes sized at $450 million and a $419mn respectively.
Moody's Investors Service will rate PHH's Chesapeake Funding LLC Series 2012-2 floating rate notes. The ratings agency has assigned provisional ratings of 'Aaa' , 'Aa2', 'A2', and 'Baa2' to the class A, class B, class C, and class D, respectively.
The notes are backed by a special unit of beneficial interest in a pool of mostly open-end leases and the related vehicles as well as a special unit of beneficial interest in a pool of fleet receivables.
According to the presale report Chesapeake Funding LLC Series 2012-2 is structured with lower credit enhancements than the issuer's previous deal, Chesapeake Funding LLC Series 2012-1. The class A overcollateralization, subordination plus reserve account is 11.12%, down from 12.54% in Series 2012-1; class B enhancement is 7.95%, down from 9.22% in Series 2012-1; and class C enhancement is 5.29% as compared to 6.16% in Series 2012-1.
Moody's said in the report that the change in credit enhancements and the ratings reflect the issuer's long track record of consistently strong collateral performance since the inception of the master trust in 1998. "The collateral has exhibited lower serious default frequencies, as evidenced by client bankruptcy, and lower net losses than our assumptions, over a period which now includes a significant recession," explained analysts.
ARI has also issued it ARI Fleet lease Trust 2012-B, which will be rated by Fitch Ratings. The ratings agency has assigned a preliminary 'AAA' rating to the single tranche offering. The notes will be backed by a pool of open-end vehicle fleet lease contracts for cars, light duty trucks and other vehicles originated and services by ARI.