Huntington Bancshares followed through Thursday on its previously announced plans to launch a regional $1.5 billion prime auto securitization of indirect loans underwritten and serviced for partnering dealerships.

The Huntington Auto Trust 2016-1 filed a public prospectus that it will issue notes in seven class series, with nearly all of the collateral pool (over 96%) concentrated in the four triple-A rated ‘A’ note tranches with varying maturity dates.

The 2016-1 deal via Credit Suisse, Bank of America Merrill Lynch and JPMorgan is the first for the Columbus, Ohio-based bank since June 2015. Huntington earlier announced during its third-quarter earnings call to push out over $2.6 billion in auto and commercial loan receivables on its books into the asset-backed markets during the fourth quarter.

The 2016-1 capital structure includes a one-year, $355 million money-market tranche that has a provisional ‘P-1’ short-term rating from Moody’s Investors Service and ‘A-1+’ from Standard & Poor’s. Also in the senior notes stack is a $380 million Class A-2 series due 2019; an A-3 issue for $450 million and a 2020 maturity date; and an A-4 tranche sized at $258 million that is due 2022.

The initial credit enhancement on the Class A notes is 4.05%, consisting of subordination and a 0.25% reserve fund.

Huntington 2016-1 is only the eighth auto-loan pooling for the bank since 2007, with a pool consisting or regionally issued loan receivables in six states secured by cars, SUVs and light-duty trucks.

Moody’s noted that while Huntington has limited securitization experience, the trust’s infrequent pools as well as the geographic concentration is mitigated by higher-quality credit assets, according to Moody’s. 

The collateral pool of 92,228 loans is comprised of borrowers with a strong weighted average FICO score of 765, and an average remaining loan size of $16,264 – of which 48% are new cars. The average APR is 4.85%. Only 16% of the loans are to customers with FICOs below 700; 66% are to borrowers with FICOs greater than 739.  

Like other auto asset-backeds, Huntington is moving toward longer term loans in its pools with 75% of the loans with original terms greater than 60 months (32% are between 73 and 75 months, compared to only 24% in Huntington’s lone 2015 auto ABS).

Loss expectations are minimal at 0.65% for the entire asset pool, reflecting the historical performance of the portfolio: after a post-crisis peak of 1.53% in 2009, annualized net losses have steadily dropped year-over-year and were at a low mark of 0.22% in 2015, according to Moody’s.   

Huntington’s overall auto loan portfolio was sized at approximately $10.9 billion at the end of October, and includes loans incorporated from its 2016 merger with FirstMerit Bank of Akron, Ohio.

The new deal is the trust’s first to file a prospectus complying with new expanded asset-level ABS disclosure requirements under Regulation AB II standards established by the Securities and Exchange Commission.

Huntington first filed a prospectus under an SF-3 registration, joining at least eight other prime, subprime and captive lenders to comply with the standards.

The SEC has not specified the types of additional disclosures that auto ABS trusts will need to disclose, but Ford Motor Credit earlier this year established a template that included additional information on average loan-to-value levels of the collateral pool and payment-to-income ratios of borrowers.

In its preliminary prospectus filing Thursday, Huntington disclosed the weighted average LTV of the pool at 91.29%, but not PTI ratios.  

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