Gateway One Lending & Finance is preparing its first prime auto loan securitization, according to rating agency a presale reports.
The $200 million deal, TCF Auto Receivables Owner Trust 2014-1, will be backed by a pool of vehicle installment sales contracts for new and used automobiles and light-duty trucks. The pool consists of 11,977 primary loan contracts.
Six tranches of notes will be issued, including a $31.6 million class A-1 money market tranche that received a preliminary A-1+’ ratings from Standard & Poor’s and P-1’ from Moody’s Investors Service. These notes mature in July 2015.
Three classes of notes were assigned provisional triple-A ratings: the $54.3 million class A-2 notes maturing in May 2017; the $54.3 million class A-3 notes maturing in September 2018; and the $42.4 million class A-4 notes maturing in December 2019.
Credit Suisse is the lead underwriter.
The weighted average FICO score for the pool of loan contracts is 692 and the weighted average seasoning for the collateral is 5.8 months.
As of March 31, 2014, Gateway’s total managed portfolio of receivables outstanding was $2.7 billion. Gateway is a wholly owned subsidiary of TCF National Bank, specializing in indirect auto finance. It originates and services primarily used retail auto loans acquired from franchised and independent dealers across 40 states. Before Gateway, the management ran Onyx Acceptance Corp. for 11 years until that company was purchased by Capital One. Gateway was formed in 2007.
Gateway was acquired by TCF in 2011 to grow its auto finance business. TCF is headquartered in Sioux Falls, SD, and as of March 31, has $18.8 billion in total assets, with 381 branches providing retail and commercial banking services throughout western states. As of February 5, TCF National Bank was rated BBB-by Fitch Ratings.