Ford Motor Credit is marketing a $1.6 billion securitization of prime retail auto loans, according to rating agency presale reports.
Ford Credit Auto Owner Trust 2015-A will issue a $359 million money market tranche and three classes of notes with preliminary AAA’ rating from Fitch Ratings; all four tranches benefit from credit enhancement of 5.5%.
J.P. Morgan Securities is the lead underwriter.
Ford relies heavily on securitization for funding; so far this year it has completed one other auto loan deal and a dealer floorplan deal.
The pool of loans backing 2015-A is consistent with prior deals, with a weighted average (WA) FICO score of 731 and 89.4% new vehicle loans, according to Fitch. The pool is geographically diverse, has WA seasoning of 8.5 months and consists 44.7% of loans with terms of 61 months or more.
Trucks and sport utility vehicles comprise 75.2% of the 2015-A pool, higher than 2014-C but lower than prior transactions in 2014 and the prior years. Cars represent the remaining 24.8%. Fitch views this positively, as concentrations of cars in a pool shields a transaction from weakening wholesale values tied to volatile fuel prices, which can negatively affect the values of larger, less fuel-efficient vehicles.
The WA annual percentage rate (APR) is 3.78%, consistent with 2014-C but lower than securitized pools since 2007-B. APRs may represent risk-based pricing, as lower APRs are generally offered to customers of higher credit quality
Ford Credit did not provide loan-to-value (LTV) data to Fitch for 2015-A.