Honda has priced an upsized, $1.5 billion securitization of prime auto loans, according to a regulatory filing.
The A-1 money market class was upsized to $423 million from $281 million originally; it priced at at par to yield 0.22%.
Tthe A-2 class maturing in February 2016 was upsized to $449 million from $300 million; it priced at a spread of 20 basis points over the eurodollar synthetic forward curve.
The class A-3 maturing in June 2016 was upsized to $458 million from $305 million; it priced at 27 basis points over interpolated swaps;
And the class A-4 maturing in September 2016 was upsized to $170 million from $114 million; it priced at 35 basis points over interpolated swaps.
J.P. Morgan and BNP Paribas are the joint bookrunners.
Moody's Investor Service has assigned a preliminary P-1 rating to the money market tranche and 'AAA' ratings to the other tranches. In a presale report, it cited as a strength the large proportion of low-rate, subvened loans in the pool. These rates are offered through incentive programs and tend to attract higher quality borrowers who would otherwise pay cash. "The presence of these loans should have a positive impact on overall pool performance," Moody's said.
Moody's also noted that approximately 14.5% of the loans in the pools have original terms of over 60 months, which it said is greater than in Honda's previous transaction or any of its prior transactions; such loans are generally riskier than shorter term loans.