Hyundai Capital America has slightly strengthened the credit standards underlying its first prime auto-loan securitization of the year, compared to its most recent deal issued last October.
The $1.28 billion Hyundai Auto Receivables Trust 2021-A has a higher weighted-average FICO, lower loan-to-value average, and a small downtick in the average original term length than the 2020-C shelf that priced last fall.
According to a presale report from Fitch Ratings, the deal includes a “notably” higher concentration of borrowers with FICOs above 750, which constitute 53.2% of the pool of mostly new-vehicle loans for Hyundai- and Kia-branded vehicles. (HCA is jointly owned by Hyundai Motors America and Kia Motors America, with Hyundai controlling 80% interest).
The 66-month original term length average of the contracts includes a decline from 2020-C in the proportion extended-term loans over 60 months: 58.8% compared to 60.7% in the prior deal.
The 57,550 loans in the collateral pool of a balance of $1.35 billion, or $23,496 per vehicle, with a weighted average APR of 3.4%. Loan-to-value ratios are 7.8%, down from 105.1% in 2020-C.
With the improved metrics, Fitch has lowered its forward-looking credit loss to 1.9%, down from 2.1% in the last transaction. Outstanding transactions currently project to losses ranging from 1.13%-2.24%.
HCA previously priced a
Hyundai plans to market six classes of notes, including three senior-term tranches with preliminary AAA ratings from Fitch and S&P Global Ratings: a $421.1 million Class A-2 offering due February 2024; a $421.1 million Class A-3 tranche due September 2025; and a Class A-4 tranche totaling $125.1 million due April 2027.
In addition to offering two subordinate note tranches – $23.8 million Class B (rated AA by Fitch, AA+ by S&P) and $39.6 million Class C (A/AA-) – Hyundai is also placing a $257 million Class A-1 money-market tranche with an F1+ rating from Fitch and A-1+ by S&P.
The senior notes have credit enhancement of 7.55%.
Barclays Capital is the deal’s lead underwriter.
