Volkswagen Leasing GmbH is in the market with a new €718.5 million ($950 million) securitization of German auto lease receivables.
The deal, VCL Multi-Compartment S.A., Compartment VCL 15, will offer investors two tranches that have been assigned a preliminary rating of 'Aaa' and 'A1' by Moody's Investors Service. Both tranches have been structured with floating rate notes that come due on January 2018.
The portfolio of underlying assets consists of auto lease installment receivables. Underlying lease contracts are distributed through VW Group auto dealers.
According to a Moody's presale report, as of December 2011, the provisional portfolio consists of 65,570 non-delinquent contracts with a weighted average seasoning of 7.2 months and outstanding discounted lease balance of approx. €750 million.
Although the deal has some credit weaknesses such as commingling risk and a high degree of linkage to Volkswagen Leasing GmbH, Moody's said that various mitigants have been put in place in the transaction structure, such as performance-related triggers to switch to sequential amortization and a tax event trigger to fund an additional tax reserve.
Commingling risk is mitigated by the automatic termination of collection rights in case of a servicer insolvency, a rating trigger to change the cash flow sweep mechanism and to provide cash collateral and a pledge of non-securitized residual value cash flows.
Also marketing this week is another German auto ABS from Albis Leasing. The deal, Trucklease 2, is the group's second public transaction securitizing a pool of truck and other auto-related lease receivables.
The deal has been rated by Standard & Poor's. It will offer investors up to €100 million of class A notes, €9.0 million of class B notes, €15.7 million of class C notes and €9.0 million of class D fixed-rate notes. At closing, Trucklease Compartment No. 2 will issue €16.7 million of unrated subordinated notes.
NL Mobil Lease GmbH, which belongs to Albis, initially originated the assets. At closing, Gallinat-Bank, which is also part of the Albis group, will sell the lease receivables directly to Trucklease Compartment No. 2, the issuer.
