Harley Davidson has upsized a securitization of motorcycle loans, by $200 million to $850 million, according to a regulatory filing.
The deal, Harley-Davidson Motorcycle Trust 2014-1, now offers $126 million in class A-1 notes due April 2015; $423 million in class A-2 notes due April 2018; 216 million of class A-3 notes due September 2019 and $85 million of class A-4 notes due October 2021.
Standard & Poor’s has assigned a preliminary A-1+’ rating to the money market tranche and AAA’ ratings to the longer-dated tranches, all of which benefit from credit enhancement of 17.8%.
RBS is the lead bookrunner and BMO Capital Markets, Loop Capital Markets, Mistubishi UFJ Securities, Mizuho Securities and PNC Capital Markets have been added as joint bookrunners, joining RBS, Citigroup and J.P. Morgan.
The pool is comprised of 62,733 contracts with an average principal balance of $14,746, a weighted average interest rate of 10.8%, a weighted average original term of 73 months and a weighted average FICO score of 707.
According to S&P’s presale report, Harley-Davidson’s latest offering differs from its previous one, completed in 2013, in that it will issue only class A notes, whereas HDMOT 2013-1 also issued class B notes. As such, the latest transaction’s credit enhancement does not include subordination.
Among other differences, the percentage of loans for used motorcycles decreased to 33.6% in the latest deal from approximately 37.1% in the previous deal. The weighted average interest rate of 10.8% is also lower than 11.7% in the previous transaction.