LeasePlan Corp. N.V. is preparing its seventh securitization of European commercial vehicle leases, this time with €549.1 million in new notes through its German subsidiary.
LeasePlan Deutschsland GmbH’s Bumper 7 S.A. trust will be collateralizing auto lease receivables and residual value cash flows topping €720 million. The notes will be issued through a Class A stack totaling €500 million and a Class B tranche for €49.1 million.
The transaction is being led by Societe General and Citigroup, and being co-arranged by LeasePlan and Societe.
The Class A notes have received preliminary ‘AAA’ ratings from Standard & Poor’s, while the Class B have an early rating of ‘AA’, according to an S&P pre-sale report issued Tuesday.
The class A notes are supported by 30.61% credit enhancement through subordination, excess spread and a liquidity reserve that will be funded at closing.
The transaction includes an initial 12-month revolving period in which the originator can sell further lease receivables and expectancy rights to the issuer.
More than 58% of the pool are tied to the residual values (€417.8 million) of the primarily commercial vehicles being leased, which carry the risk of market-value decline. S&P is assuming a value decline of 38.36% in its ratings assessments.
S&P stated its concerns about the high concentration of single-obligor lessors – about 2% each for each of the top five lessee group – as well as 20% of the preliminary pool by volume comprised of Volkswagen vehicles equipped with diesel engines affected by the manufacturers’ emissions tampering scandal.
The leases are vintage 2004 to 2015 contracts, with the bulk between 2012 and 2015.
The securitization is LeasePlan’s first pooling of leases in over two years, following up LeasePlan Nederland N.V.’s transaction that sold €537 million in securities backed by Dutsch auto lease receivables and residual values.