Ford Motor Credit is marketing $777 million of bonds backed by lines of credit that it extends to auto dealerships, according to Standard & Poor’s.
There are two separate offerings that are being marketed concurrently, $647 million of three-year notes and $150 million of two-year notes.
Ford Credit Floorplan Master Owner Trust A will issue $627 million of Series 2016-3 notes with an expected maturity of July 2019. The $600 million senior class is split between two tranches, one fixed-rate and one floating-rate with preliminary ‘AAA’ ratings from S&P; the $27.45 million subordinate notes are rated AA+. There will also be two unrated tranches.
The trust will also issue $156.863 of Series 2016-4 notes with an expected maturity of July 2018. S&P expects to assign an ‘AAA’ rating to $150 million of senior floating-rate notes and an ‘AA+’ to $ 6.86 million of subordinate fixed-rate notes. There are also two tranches of unrated notes.
Barclays Capital Inc., Goldman, Sachs & Co., J.P. Morgan Securities, and SG Americas Securities are the underwriters of both the three-year notes and the two-year notes.
The collateral consists of receivables secured by vehicles from designated revolving floorplan accounts offered by Ford Credit to Ford Motor Co.'s retail automobile dealers. Each receivable is an obligation in which the dealer agrees to repay the loan amount that it incurred when purchasing a vehicle for its inventory. The related vehicle secures the receivable. The dealer generally repays the related receivables when it sells the underlying vehicle.
A dealer's inventory may include new and used cars and light-, medium-, and heavy-duty trucks, which include vans and other vehicle classifications such as SUVs, crossover vehicles, and vehicles intended for fleet sales or sales of 10 or more vehicles to a corporation or governmental agency.
According to S&P, there have been no material changes in collateral performance since the previous transaction as the monthly payment rates have been stable, averaging above 40% year to date, and losses have remained at 0%.