Hyundai priced $1.325 billion of securities backed by prime auto loans on Wednesday, according to a regulatory filing.
J.P. Morgan Securities, BNP Paribas Securities, HSBC Securities, and RBC Capital Markets are the underwriters. CIBC, Credit Agricole, Credit Suisse, PNC and TD Securities are the co-managers.
Standard & Poor’s and Fitch Ratings assigned preliminary AAA’ ratings to three classes of senior notes that benefit from credit support of approximately 10.8%.
The 1.05-year notes priced at 18 basis points over the eurodollar synthetic forward curve; the 2.35-year notes priced at 21 basis points over interpolated swaps; and the 3.57-year notes priced at 25 basis points over interpolated swaps.
Also on offer were AA+’/ AA’ rated class B notes with a weighted average life of 3.98-years that priced at 35 basis points over interpolated swaps. The 4.20-year, class C notes, rated AA-’/’A’, priced at 65 basis points and the BBB+’/ BBB’ notes with a weighted average life of 4.25-years priced at 105 basis points over interpolated swaps.
Hyundai's latest deal priced at wider spreads than its previous deal, the series 2014-A, which was completed in March. Spreads on the triple-A notes of the latest deal were up to five basis points wider and the spread on the double-A rated notes were five basis points wider.
This wider pricing may reflect the slightly weaker credit metrics of the latest deal. S&P said in its presale report that “the percentage of loans by loan balance with 61-month to 72-month terms increased to approximately 53.2% from 52.7%, and the percentage of new vehicles decreased to 94.6% from 95.0%”.
CarMax priced an prime auto loan securitization the same day. Compared to the Hyundai deal, spreads on CarMax’s triple-A notes were up to seven basis points wider.