American Honda Finance Corp. priced an upsized offering of $1.25 billion of bonds backed by prime retail auto loans, according to a regulatory filing. The deal was originally marketed at $1.0 billion.
Honda Auto Receivables 2015-1 issue a $279 million money market tranche rated P1/A1+ by Moody’s Investors Service and Standard & Poor’s that yields 0.24%.
There are also three classes of fixed-rate notes with preliminary triple-A rating from both rating agencies: $384 million of notes with a weighted average life of 1.06 years pay 28 basis points over the Eurodollar synthetic forward curve; $394 million of notes with a weighted average life of 2.1 year pay 27 basis points over interpolated swaps and $122 million of 2.96-year notes also pay swaps plus 27 basis points.
Merrill Lynch, Pierce, Fenner & Smith, Citigroup Global Markets, and Mizuho Securities USA are the underwriters.
The credit enhancement structure is unchanged from the series 2014-4 transaction except that the estimated excess spread per year increased to approximately 2.32% from 2.26%, according to S&P, and the collateral composition has changed “minimally.”?
The pool has with a weighted average FICO score of 758, up from 757 in the previous transaction, and the percentage of loans with original terms of 61-72 months increased to 14.26% from 14.16%. The percentage of loans backed by new vehicles also increased minimally to 91.2% from 90.6%.
All three longer-dated tranches priced inside of similar tranches of the previous prime auto loan securitization, from Hyundai. The money market tranche of that deal, Hyundai Auto Receivables Trust 2015-A, pays 30 basis points over EDSF, while the two- and three-year tranches yield swaps plus 29 basis points.
Honda was last in the market with a prime auto loan securitization in November 2014.
