MotoVoto Plans Auto-Lease Backed ABS

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MotoVoto Finance, one of the U.K.’s largest players in used car financing, is preparing to market its sixth securitization of an undetermined volume of its fixed-rate consumer auto leases.

Ratings agency reports issued Monday detailed the company’s new securitization transaction Turbo Finance 6 plc, including the issuance of preliminary ratings on asset-backed floating rate Class A and B notes and fixed-rate, interest-deferred Class C notes. All of the notes mature in 2023.

According to a presale report from Standard & Poor's, the outstanding principal balance on the leases is £392 million (US$567.5 million).

The Class A notes carry preliminary structured finance ratings of ‘Aaa’ from Moody’s Investors Service and  ‘AAA’ from Standard & Poor’s. The Class B notes are assigned a preliminary ‘Aa3’ and ‘AA-’ ratings, while the Class C are rated a preliminary ‘Ba2’/’BBB’. A series of Class D notes planned to back a reserve fund for the transaction will be unrated.

The reserve fund will be partially funded at 0.7% of the initial asset pool balance, but will be topped up to its 1.3% target level to cover liquidity shortfalls on fees, swap payments and interest on the Class A and B notes.

The Class A notes include 10.7% of available credit enhancement, with the B notes carrying 3.2% enhancement.

According to Moody’s, the provisional portfolio consists of 53,342 lease contracts with a  weighted average seasoning of four months and remaining terms of 48 months. The report denotes none of the leases involve diesel-engine vehicles from scandal-plagued Volkswagen, which admitted last year to having installed software in 11 million diesel cars that was designed to elude emissions testing standards. 

The leases being packaged were originated by MotoVoto’s parent institution, FirstRand Bank Ltd., which will be the servicer for life for the loans. BNP Paribas is the trustee and backup servicer and Bank of America Merrill Lynch is the credit swaps counterparty.  BoA Merrill Lynch and Lloyds Bank plc are co-arrangers on the transaction.

The securitization is the company’s first since it issued £101.3 million ($163 million) of U.K. auto leases. 

FRB's London branch is the third-largest independent lender by market share in the U.K.

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