Ford Motor Credit is offering $810.8 million of securities backed by a revolving pool of prime auto loans, according to reports from Moody’s Investors Service and Standard & Poor's.
The deal, called Ford Credit Auto Owner Trust 2015-REV2, will issue $750 million of triple-A rated class A notes that benefit from 9.5% initial hard credit enhancement. At the subordinate level, $30.4 million of Aa1’/’AA’ rated class B notes and $30.4 million of A1’/’A’ class C notes benefit from 5.75% and 2% credit enhancement, respectively.
The notes are all due January 15, 2027.
FCAOT 2015-REV2 is structured with a five-year revolving period during which loan collections may be used to purchase additional receivables. The structure includes pool composition requirements, a credit enhancement test, and amortization triggers intended to limit deterioration in pool quality and credit enhancement during the revolving period.
Bank of America Merrill Lynch, Barclays, Credit Suisse, and J.P. Morgan are serving as lead underwriters on the transaction.
The initial pool consists of 73,738 prime auto loans secured by new (89.44%) and used (10.56%) vehicles. The loans have an average principal balance of $23,055 and a weighted average (WA) remaining term of 55.9 months, with 7.9 months seasoning.
The latest deal comes sixth months after Ford's initial offering from the 2015-REV series. The class A, B, and C notes of that deal also befitted from 9.5%, 5.75%, and 2% initial credit enhancement, respectively.
Similarly to 2015-REV1, borrowers in the pool have a high average FICO score of 731, which is just one point lower than the average score of 732 for the first series of the year. The pool’s WA annual percentage rate increased to 3.78% from 3.65% for 2015-REV1, which was the lowest rate of any Ford issuance since 2005.
Vehicles in the pool consist of light trucks (44.17%), utility vehicles (30.15%), and cars (24.91%), with the highest concentration of loans in Texas (15.78%), California (9.13%), and Florida (6.21%).
The deal is expected to close the week of July 21.
