Ford Credit Canada Ltd. plans to issue $644 million securitization deal from its Canadian auto securitization trust.
The series 2014-R2 deal has ben assigned preliminary ratings by Fitch Ratings and DBRS. RBC Dominion Securities is lead manager on the transaction.
According to the presale reports, the structure will offer $600 million of triple-A rated notes; $18.96 million of double-A rated, class B notes; $12.63 million of single-A rated class C notes and $12.63 million of triple-B rated notes.
Fitch said in its presale report that the note resemble the previous issue, which it rated in 2012; as well as deals issued from Ford’s Canadian trust in 2013, which Fitch did not rate.
The current deal benefits from a stronger weighted average (WA) FICO score of 746, up from 742 in 2013-R4 (NR), 735 in 2013-R1 (NR) and 732 in 2012-R1. The WA original term for 2014-R2 is 64.4 months, with a WA remaining term of 56.7 months, resulting in 7.7 months of seasoning, down from 2013-R4 (NR), which had 10.0 months of seasoning, but in line with prior 2012-2013 pools, including 2012-R1 (6.9 months).
Extended-term (more than 60 months) loans comprise 48% of the collateral backing 2014-R2, the highest level ever seen in a FAST securitized pool, and up slightly from 46.2% in 2013-R4 (NR), according to Fitch. “Longer-term loans typically have higher loss severity, as loan amortization trails vehicle depreciation,” the report stated.
Ford's Canadian finance arm has relied heavily on securitization for funding, according to Fitch. The company completed two public transactions as well as a number of private transactions last year.