Mercedes-Benz is marketing its first dealer floor plan securitization in a year, with a new $750 million bond issuance split between a pair of two-year and three-year maturity tranches.
Mercedes-Benz Master Owner Trust Series 2016-A and Series 2016-B – each totaling $375 million in notes - are the first notes package of 2016 that will be backed by financing of car dealer inventories of primarily new Mercedes automobiles.
It is Mercedes-Benz' first securitization of inventories in a year for dealers authorized to sell new Mercedes-Benz passenger, light-duty truck and crossover vehicles by parent Daimler AG.
The German automaker issued a lease securitization through its Mercedes-Benz Auto Lease Trust in March.
The two-year Series 2016-A and the three-year 2016-B notes for MBMOT each have a preliminary ‘AAA’ structured finance rating by Fitch Ratings, according to a Fitch presale report issued Monday.
The notes are supported by 16.88% credit enhancement, comprised of 16.25% overcollateralization and a 0.63% reserve account. The CE is in line with the 16.8% figure from the 2015-A and 2015-B series of car dealer inventory pools gathered for MBMOT’s previous securitization in April 2015.
The CE, required to achieve the ‘AAA’ rating, is lower than recent dealer floorplan deals by Ally Master Owner Trust 2015-3 (26.5%) and Nissan Master Owner Trust 2015-2 (19.41%).
This is the third MBMOT transaction rated by Fitch since 2012.
JPMorgan is the underwriter.
MBMOT has $3.36 billion in aggregate receivables outstanding, through 272 dealer accounts. The principal balance is slightly higher than last year’s pool of $3.27 billion, although the number of dealer accounts has shrunk from 285.
The balance of receivables in each account averages $12.3 million, an increase from $11.47 million in the 2015-A/B series.