Hyundai Capital America, co-owned by Hyundai Motor America and Kia America, is preparing to sponsor about $1.3 billion in automobile asset-backed securities, through the Hyundai Auto Receivables Trust, 2023-C.
The underlying revenues are derived from composed of both new and used vehicles, according to ratings analysts at Fitch Ratings, although new vehicles accounted for almost the entire pool, 94.3%.
The current deal is slightly smaller than its predecessor deal, the HART 2023-B. Also, the HART 2023-C has a cumulative net loss (CNL) rate of 1.60%, which is either generally consistent with previous deals or slightly lower, according to Fitch. The rating agency says the trust expanded the static pool's vintage range, given its strong managed pool and securitization performance, and slightly better collateral pool characteristics.
Fitch expects to assign ratings of 'F1+' to the class A1 notes; 'AAA' to the A-2A through A4 notes; 'AA+' to the class B notes and 'A+' to the class C notes.
All of the class A notes, of which there are four tranches of notes, have a credit enhancement level of 7.55%, according to Fitch, while classes B and C have credit enhancement levels of 5.75% and 2.75%, respectively, the rating agency said.
BNP Paribas Securities is the lead underwriter on the deal, which will issue notes through six tranches of notes. Hyundai Capital America is the asset seller and servicer of the notes, Fitch said.
Among the deal's positive credit drivers is a collateral pool that is very close to recent HART transactions, Fitch says. For example, the assets have a weighted average (WA) FICO score of 768. Extended-term contracts, specifically those of 61-plus months—account for just 64.5% of the pool. On a weighted average (WA) basis, the collateral had an original term of 65.6 months.
Underlying auto loans with FICO scores above 750 accounts for 59.6%, slightly below the 64.4% concentration seen on the 2023-B, a high for the platform.
