Prime auto loans is once again revving up a securitization deal, as the Huntington Auto Trust 2024-1 comes to market to sell $813.89 million in asset-backed bonds to investors.
The Huntington National Bank originated the 30,695 underlying loans in the collateral pool, and the notes will repay investors through a capital structure composed of A, B, C, and D notes and seven tranches, according to Moody's Investors Service analysts. All four of the class A notes receive 3.25% in total hard credit support, while the B, C and D notes benefit from credit support amounting to 2.26%, 1.26% and 0.25%, respectively, as a percentage of the initial pool balance. This is based on initial overcollateralization of 0.0%, which builds to 0.50%. A non-declining 0.25% reserve account, and subordination–except the D tranche–also provide credit support.
Morgan Stanley is lead underwriter on the deal, which is slated to close on February 22, analysts said.
Moody's notes that Huntington National Bank (HBAN) services all of the auto loans itself, and counts its experience servicing prime quality loans as a credit positive. HBAN's ratings include an A3 for long-term, senior unsecured debt, an A2 long-term credit assessment, and P-1 for short-term deposits. It will also service the transaction. New and used vehicles compose the collateral pool, with used vehicles making up the majority of the pool, at 60%. The underlying loans have a weighted average (WA) original term of 72 months, and a remaining term of 61 months, analysts said.
On a WA basis the loans have a FICO score of 784, an APR of 7.68% and they have a loan-to-value ratio of 90.03%, the rating agency said. Ohio, Indiana and Kentucky account for the largest concentrations in the pool by the loan borrowers' geographic origins, at 31.8%, 12.2% and 8.3%, respectively.
Moody's assigns ratings of P1 to the A1 tranche; Aaa to classes A2 through A4; and Aa3, A3 and Baa3 to classes B, C and D, respectively. Maturity dates on the notes range from Feb. 18, 2025 on the A1 tranche to through Jan. 15, 2032 on the class D notes.
