Mercedes-Benz Financial Services USA and Nissan Motor Acceptance Corp. added over $2 billion of bonds backed by prime auto loans to the new issue pipeline.

The two offerings follow on the heels of a $1 billion-plus deal launched by Ally Bank last week.

Mercedes, a unit of Daimler AG, is marketing $959 million of notes backed by new and used prime auto loans. Mercedes-Benz Auto Receivables Trust (MBART) 2015-1 offers four tranches of senior class A notes, with $235 million of money market fixed rate notes preliminarily rated ‘A-1+’ by Standard & Poor’s.

There are also three tranches of notes with preliminary ‘AAA’ ratings:  $343 million of class A-2 notes due in June 2018 is split into fixed and floating-rate tranches; $281million class A-3 fixed-rate notes due in December 2019; and $100 million of class A-4 fixed-rate notes due December 2021.

Mitsubishi UFJ Financial Group, Bank of America Merrill Lynch, and Societe Generale are serving as joint bookrunners on the deal; BNP Paribas and SMBC Nikko Securities are acting co-managers.

MBART 2015-1 is the company’s seventh prime auto loan securitization to date. Mercedes-Benz Financial Services USA last came to market in July 2014 with MBART 2014-1, which is structurally similar to the latest MBART deal.

The 33,094 loans in the pool are backed by new vehicles and used vehicles. The concentration of used vehicles decreased to 59.36% from 72.43% in the sponsor's previous deal, MBART 2014-1, completed in July 2015; new vehicles comprise 40.64% of the collateral pool. Similarly to the previous four MBART deals, California (19.86%), Texas (11.27%), Florida (9.98%), New York (7.5%), and New Jersey (4.94%) are the top five states with the highest concentration of loans.

Borrowers in the pool have the highest weighted average (WA) FICO score of any MBART transactions at 773, up from 767 for MBART 2014-1. The loans have a WA principal balance of $31, 124 with a WA seasoning of 10.01 months, and an average of 54.89 months remaining. The decrease in used vehicles has resulted in a decrease in pool’s loan-to-value ratio to 103.94% compared with 107.4% for MBART 2014-1.

In its presale report, S&P says that the availability of 6.1% credit support for the class A notes should provide more than 5x coverage of the expected net losses, which are in the range of 0.65%-0.75%.

The deal is expected to price later this week and close on July 22.

The $1.04 billion Nissan Auto Receivables 2015-B Owner Trust (NAROT 2015-B) will issue a $210 million money market tranche and the tranches of notes rated ‘AAA’ by Fitch Ratings: $370 million of notes with a final maturity of July 2018; $320 million of notes due in March 2020; and $100 million of notes due in January 2022. All four tranches benefit from credit enhancement of 4.25%.

The transaction is backed by receivables from loans for new and used Nissan and Infiniti cars and light-duty trucks.  According to Fitch, the collateral composition and credit quality are generally consistent with those of prior pools. The WA FICO score is 774, new vehicles total 90.5%, Nissan brand vehicles represent 88.65% and the pool is geographically diverse.

Loans with terms of more than 60 months total 52.65% of the pool, which includes 73−75 month original term loans that total less than 4%.

Citibank is the underwriter.

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