Mercedes Benz Financial Services (MBFS) USA is coming around the pike with a nearly $1.37 billion auto lease-backed deal, the first this year off this program, according to a pre-sale report from Standard & Poor’s.
MBALT 2014-A is split among four tranches, all with top-notch preliminary ratings. (See table below).
Citigroup is the lead arranger.
The transaction securitizes prime auto leases with a weighted average FICO score of 781. The vehicles in the pool historically have had strong retention values. The leases in the pool are originated by Mercedes-Benz dealers.
The deal has an initial overcollateralization of 16.5%.
MBALT 2014-A is the originator’s fourth publicly placed auto lease securitization and its sixth auto lease deal overall, according to S&P.
At the end of the year, MBFS USA’s portfolio of retail lease contracts totaled 364,870 contracts worth a total of about $17.3 billion. The portfolio has grown steadily since 2010. Recent performance has been healthy — at the end of last year overdue payments beyond the 30-day mark and repossessions were 0.48% and 0.39% of the firm’s portfolio, respectively.
S&P said the program’s outstanding deals have so far, across the board, experienced “very low losses.” The worst performing deal of the bunch that’s over a year old - 2012-A - exhibits cumulative net losses below 0.15%.
