World Omin Financial lans to issue $988 million of bonds backed by prime auto loans, according to Fitch Ratings.
The deal, World Omni Auto Receivables Trust (WOART) 2014-B, will issue a $186 million money market tranche, rated F1+’ by Fitch, and three tranches of notes rates AAA,’ one maturing in January 2018, another in January 2020 and another in December 2020. All benefit from credit enhancement of 4.55%. There is also an AA’ rated tranche with credit enhancement of 2.5%.
All of the loans backing the deal are secured by cars and light duty trucks manufactured by Toyota and originated by World Omni.
According to Fitch, 2014-B has strong credit quality with a weighted average (WA) Fair Isaac (FICO) score of 725, and new vehicles total 96%. 2014-B is geographically concentrated in the Southeast, consistent with historical World Omni originations.
However, it has a high percentage of loans with original terms greater than 60 months, 74.3%. That’s the highest ever to date in a WOART pool. “Extended-term loans have historically produced higher loss rates,” the report states. “However, the borrowers within this longer-term range have strong obligor FICO scores.” Fitch accounted for this risk in its determination of the loss proxy.