Navistar Financial Corp. (NFC) is issuing a $120.1 million trucking and equipment loan securitization.
The deal called Navistar Financial 2011-A Owner Trust will issue a single tranche of fixed-rate notes that have been rated 'AAAsf' by Moody's Investors Service.
The transaction securitizes loans and full-payout leases extended to finance the purchase of new and used medium or heavy duty trucks, truck chassis, busses or trailers that are originated and serviced by NFC.
Moody's said in a presale report that the largest obligor included in the deal represents 10% of the collateral pool, while loans with balloon payments represent approximately 70% of the collateral pool.
The risk imposed by this high concentration is mitigated by the level of overcollateralization, excess spread, and reserve funds available to the transaction. The structure of the transaction also includes performance triggers that when breached, would cause a build in enhancement.