A mixed collateral group of auto dealer floorplan receivables will secure the NextGear Floorplan Master Owner Trust, 2023-1, raising $438.2 million in asset-backed securities (ABS) from two distinct groups of assets.
Dealer loans that purchased used cars and used light duty trucks for future sale comprise asset group one, according to a pre-sale report from Moody's Investors Service. Loan receivables to purchase new and used recreational vehicles, heavy-duty trucks, rental and salvage vehicles, motorcycles, boats and other related assets, Moody's said. In the entire portfolio represents revenue from 15,531 independent dealerships across the country, with just a small amount of franchise operations.
Mitsubishi UFG is the lead underwriter on the transaction, slated to close in about a couple of weeks, according to details from the Asset Securitization Report deal database. NextGear, who is sponsoring the deal, also originated the loans and serves as servicer and administrator in the transaction, Moody's said.
NextGear Floorplan, 2023-1, is a master owner trust and will issue notes through discrete series of two classes of notes, according to S&P Global Ratings' own pre-sale report on the deal. Class A-1 notes will be benchmarked to the Secured Overnight Financing Rate (SOFR), while classes A-2 and B will issue fixed-rate notes, S&P said.
For the most part the deal looks similar to the 2022-1, according to S&P, yet the rating agency noted one slight shift in the collateral pool. NextGear reduced the maximum concentration of recreational vehicles and daily rentals, while increasing the maximum concentration of heavy-duty trucks and salvage vehicles. Although the trust made these changes within the subgroups, the concentration limit for group two overall stands at 12%, like the 2022-1 deal, S&P said.
S&P expects to assign 'AAA' ratings to the class A notes and 'A' to the class B notes, while Moody's will assign ratings of 'Aaa' to classes A-1 and A-2, and 'A2' on the class B notes, that rating agency said.
According to Moody's all of the notes have an expected maturity of March 16, 2026, and a legal final maturity two years and a day later.
