Ford Motor Credit Co. and Nissan Motor Acceptance Corp. continued the rush of recent auto receivables securitizations as each has launched their latest owner trust deals.
Ford issued its second ABS pool of retail auto loans this year in its $1.32 billion Ford Credit Auto Owner Trust 2016-B platform, which features five classes of notes and the automaker’s fourth overall Reg AB II-compliant transaction. Nissan is looking to price the Nissan Auto Receivables 2016-B Owner Trust that will market $1.2 billion in notes of new and used prime auto loans, following up on its $1 billion securitization of consumer retail loans in January.
The Ford trust transaction is divided among six classes of notes, including a one-year $288.3 million tranche that was granted short-term ‘A-1’ and ‘F1’ provisional structured ratings by Standard & Poor’s and Fitch Ratings, according to agency presale reports. The Class A notes are split among four tranches, topped by a Class A-2A fixed-rate and A-2B floating-rate notes structure totaling $460.2 million notes issuance, due 2019 and with the allocation to be determined (the A-2B notes are not expected to exceed $345.1 million, however, according to Fitch).
The fixed-rate Class A-3 notes total $382 million, with an extended maturity to 2020; the A-4 notes totaling $120.48 million extend through 2021. The Class A-2 through Class A-4 notes are all rated ‘AAA’ by S&P and Fitch, and have credit enhancement support totaling 11.3% including a yield-supplement reserve account Ford is funding to compensate for promotional low-APR rates offered by dealers (yield supplement overcollaterization is a special credit enhancement feature in auto ABS deals that cover any funds shortage from subvented contracts in order to meet coupon payments and service fees on the subordinate notes).
The Class B subordinate notes of $39.51 million are rated ‘AA+’ by S&P and ‘AA’ by Fitch. The Class C notes totaling $26.34 million are rated ‘AA’/‘A’.
The transaction is expected to close April 26.
S&P stated that FCAOT 2016-B is similar in structure to other recent Ford deals, but with slightly more seasoning (7.8 months vs 7.1 months in FCAOT 2016-A) and a boost in average loan-to-value of 97.73%.
Once again, Ford is issuing a securitization that follows a pilot program for Regulation AB II compliance, in which Ford voluntarily provides additional investor information in its deal registration such as the pool’s weighted-average payment-to-income (PTI) ratio, the percentage of subvented contracts, and the percent of commercial-use vehicles in the pool.
The Nissan Auto Receivables 2016-B Owner Trust also includes four Class A notes tranches, including a short-term, one-year notes class ($291.4 million) and a split three-year Class A-2 fixed-rate/floating-rate structure similar to Ford’s. The Fitch triple A-rated Nissan Class A-2A and A-2B notes are to split $430 million in notes, with rates to be determined. The Class A-3 notes maturing in 2021 total $378.6 million, and the Class A-4 notes due 2022 total $100 million.
Fitch says the collateral composition of primarily new Nissan vehicles and the credit quality of the pool of loans is consistent with prior Nissan pools. Those features include a high-average FICO score of 771, and a new-vehicle share of 91.3% of the collateral assets. Fitch reports the 98.4% of the pool consisting of Nissan-branded vehicles is the highest concentration of the captive brand of any NAROT pool.
Nissan is also placing more long-term notes into the pool, totaling 4.6% of the collateral. It’s the eighth Nissan owner trust loan pool to have notes extending six years and beyond.
Societe Generale is the underwriter for NAROT 2016-B.