Hyundai is marketing its second prime auto loan securitization of the year, according to Fitch Ratings.
J.P. Morgan is the structuring lead manager.
The $1.169 billion Hyundai Auto Receivables Trust (HART) 2015-B will be backed by a pool of loans used to purchase new and used vehicles manufactured by Hyundai Motor Co. and Kia Motor Co. and originated through Hyundai Capital America, which will also act as the servicer.
The trust will issue five senior tranches of notes that benefit from credit enhancement of 7.55%; Fitch has assigned a preliminary F1+’ rating to the money market tranche and AAA’ ratings to two tranches maturing in April 2018, one maturing in November 2019 and one maturing in July 2021.
According to Fitch , the loans backing the latest deal are relatively consistent with recently issued HART transactions, with a weighted average FICO score of 745 and new vehicles comprising 92.8% of the pool.
Overall exposure to loans with longer terms, 60 months or more, has decreased slightly in 2015-B; however for the first time, the pool includes about 5% of loans with terms of 73−75 months. Longer terms loans are generally considered to be riskier because they amortize more slowly. Cars tend to depreciate sharply once they are drive off the dealer’s lot, so the more slowly they are repaid, the longer a borrower is “underwater” on the loan.