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Ford launches $1.1B auto-loan ABS with revolving pool

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Ford Motor Credit Co. is marketing $1.1 billion in bonds backed by a five-year revolving pool of prime-quality retail loan contracts.

The Ford Credit Auto Owner Trust 2020-REV1 transaction is Ford’s 12th under its platform that permits revolving assets during the pre-amortization period of the transaction.

The notes are secured by a loan pool totaling $1.95 billion, from 68,921 contracts FMC underwrite through Ford Motor Co. dealerships. The pool’s attributes include a weighted average FICO of 743, a WA APR of 3.08% and WA original terms of 66 months on the loans.

The collateral is mostly new vehicles (89%), made up almost entirely of pickup trucks (51%) and sport utility/crossover models (38%).

Moody’s Investors Service expects cumulative net losses totaling 2% of the original collateral pool balance; S&P Global Ratings estimates losses at 2.6%.

Bank of America Securities, Credit Agricole, JPMorgan, Goldman Sachs, and SG Americas were underwriters on the transaction.

The contracts were drawn from FMC’s managed portfolio totaling $46.65 million for 2.14 million contracts. Net losses are negligible in the portfolio at 0.53%.

The trust can only add loans that meet eligibility criteria for the pool, including a maximum 72-month original term, no delinquency over 30 days and no loans that have been extended or rewritten.

Both S&P and Moody’s assigned preliminary triple-A ratings to the senior $1 billion Class A tranche, with is supported by 9.5% credit enhancement.

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