Dealer floor plan receivables from primarily independent auto dealers will secure $328.6 million in receivables from the NextGear Floorplan Master Owner Trust, series 2024-2.
A range of new and used vehicles including light-duty trucks, salvage vehicles, heavy-duty trucks, rental vehicles and motorcycles compose the collateral pool, according to ratings analysts at S&P Global Ratings. NextGear Capital is the deal sponsor, as well as the servicer, custodian and administrator, S&P said.
The deal sells notes through just two A and B tranches of notes, according to ratings analysts at S&P Global Ratings. The class A note, which will sell a mix of floating and fixed-rate notes, benefit from credit support equaling 22.5% of the pool balance. The class B notes are covered to a level of 15.0% and the tranche sells all fixed-rate notes, the rating agency said.
The class A1 notes are priced to the three-month Secured Overnight Financing Rate (SOFR), while the A2 and class B notes are priced to the three-month interpolated yield curve. Subordination, overcollateralization, a reserve account starting at 1.00% of the pool balance—and potentially building 3.50%--help provide credit enhancement to the notes, S&P said.
The transaction will repay investors through a senior-subordinate structure, and it has a final maturity date of Sept. 17, 2029.
Asset Securitization Report's deal database says the classes A2, and B notes will yield 4.47% and 4.92%, respectively, with the notes pricing at par.
S&P assigns AAA to the A notes and A to the class B notes. Mody's Ratings also assessed the transaction, and assigned Aaa to the class A notes and A2 to the class B notes.
Drilling down further, the collateral pool is comprised of two asset groups. Group 1 contains receivables from independent auto dealers related to new and used light-duty trucks and related assets. Group 2 consists of salvage vehicles, heavy-duty trucks, rental vehicles and motorcycles, among other assets.
