A pool of about 41,923 closed-end leases will provide collateral to the Ford Credit Auto Lease Trust, 2024-A, which will sell $1.2 billion in asset-backed bonds to investors.
The transaction offers lower initial hard credit enhancement levels on both classes A and B, to 20.15% and 16.55%, respectively; compared with 23.20% and 17.85% on classes A and B notes, respectively, on the FCALT 2023B transaction, according to a S&P Global Ratings pre-sale report. In both cases, the initial hard credit enhancement followed a decrease in subordination levels, too, S&P said.
Target overcollateralization, however, did increase to 9.80% of the initial total securitization value, from 9.50%, S&P said.
As far as the collateral pool is concerned, S&P said, FCALT 2024A has a lower ratio of leases with an original term of 48 months, at 8.17%, compared with 6.85% on the FCALT 2023B deal. Leases with an original term of 24 months or less made up 14.25% of the portfolio, up from 11.49%, and that could be 14.4% if the securitized amount in the transaction is upsized, according to S&P.
The portfolio is looking stable and resilient from a credit perspective, according to Fitch Ratings analysts. On a weighted average (WA) basis, the underlying leases in FCALT-A have a FICO score of 764 and seasoning of 12.4 months, similar to recent pools. Trucks and utility vehicles make up almost the entire pool, so any residual performance for the transaction depends on the performance of these segments in the used vehicle market, according to Fitch.
Cars are have been driven out of the FCALT platform, practically. They represent only 0.4% of the pool's concentration.
Citigroup Global Markets is lead underwriter on the deal, which will issue notes through a structure of seven tranches of notes, and classes A, B, C and D. Fitch assigns F1+ to the A1 notes and AAA to the A2 through A4 notes. The rating agency notes that all of the class A notes have a credit enhancement level of 20.15%. The rating agency assigns AA to the class B notes, which will have 16.55% in credit enhancement.
S&P assigns A1+ notes to the A1 notes; AAA to the A2 through A4 notes; and AA to the class B notes.
