Commercial vehicle maker Navistar plans to tap the 144A market for its latest dealer floorplan financing securitization, according to DBRS.
NAVMT II 2014-1 will be secured by dealer notes, which are used to finance inventories of new or used medium or heavy-duty trucks, truck chassis, buses, and trailers.
This is the first dealer floorplan series Navistar will issue this year, following two term series issued in 2013.
The Series 2014-1 is structurally similar to Series 2013-2, issued in October 2013. The capital structure will offer $211 million of AAA’ rated senior notes. The notes have credit enhancement at 25%.
The issuer plans to sell $13 million of AA’ rated securities, $11.7 million A’ rated securities and $13.8 million of BBB’ rated securities. The notes are all due Oct 25, 2019.
One change in Navistar latest deal is that there is a greater concentration of dealers, which reflects the consolidation in the company’s dealer network. Primary dealers currently stand at 236 as of July 2014, down from 249 in April 2012. The average dealer in the Navistar network has over 30 years of operating experience.
DBRS noted in the presale report that consolidation of dealer networks has “reduced competition among dealers and allowed for the strongest management groups with the greatest financial resources to operate more dealerships”.