Nissan Motor Acceptance Corp. priced its second offering this year of bonds backed by prime auto loans receivables, according to a regulatory filing.
Bank of America Merrill Lynch is the lead underwriter of the deal, Nissan Auto Receivables 2014-B Owner Trust.
The $179 million of class A-1 money market tranche, rated F1+’ by Fitch, yields 0.23%. There are also three senior classes with preliminary AAA’ ratings from Fitch; the $242 million class A1 notes with a weighted average life of 1.03 years yields 23 basis points over the Eurodollar synthetic forward curve; the $343 million class 2 notes with a WAL of 2.29 years yields 23 basis points over interpolated swaps; and the $85 million class A3 with a WAL of 3.68 years yields swaps plus 27 basis points. All of the senior classes benefit from credit enhancement of 4.25%.
Pricing on an unrated $35 million of subordinated certificates was not disclosed.
Nissan completed its first auto loan deal in February. The pool of collateral backing the latest offering is similar to that of 2014-A, with receivables from loans for new and used Nissan and Infiniti cars and light-duty trucks manufactured by Nissan.
The weighted average Fair Isaac Corp. score of loans backing the latest deal is 761; new vehicles total 92% of the collateral and Nissan brand vehicles represent 90%.
Loans with extended terms of over 60 months total 46.8% of the pool. Nissan has increasingly included loans with longer terms in the last three of its deals; 52.8% of the 2014-A pool was made up of longer-term loans.
Longer-term loans are considered to be riskier not just because they increase the risk of borrowers going into financial distress but also because they generally amortize at a slower rate. Since vehicles depreciate rapidly, slower amortization increases the risk of loss in event of a default, since the car may not be worth as much as the balance of the loan.