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Honda prices upsized $2.1B prime loan securitization

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American Honda Finance Corp. has closed an upsized $2.1 billion bond offering for its third securitization of prime auto loans this year.

Honda’s 2020-3 transaction priced at par Tuesday, according to market data on Finsight.com.

A $504 million money-market tranche priced at a coupon of 0.19%; the Class A -2 $724 million tranche closed at an interest rate paying 0.27% over the expected one-year weighted-average life of the notes; the $724 million class A-3 bond tranche priced at 0.37% with a longer WAL of 2.2 years; while the $153.26 million Class A-4 notes priced with a 0.46% coupon over a 3.14 WAL.

The term-note interest rates were less than half of those from Honda’s prior transaction in May, when the coupons ranged from 0.74% to 1.09%.


The Class A-1 notes sell-off was the first money-market bond sale of the year for Honda, which in two prior deals chose to retain the notes, according to market data.

The term notes all received preliminary AAA ratings from S&P Global Ratings and Fitch Ratings.

The notes are backed by a $2.2 billion pool of loans with a high weighted-average FICO score of 771, secured mostly by new Honda- and Acura-branded vehicles sold by American Honda Motor Co. dealers (American Honda Finance is a wholly owned subsidiary of AHMC).

Prime auto-loan ABS issuance now tops $36 billion spread across 30 deals. Last year’s market totals were $51.6 billion across 47 transactions, according to Finsight.

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