Nissan Motor Acceptance Corp. (NMAC) is planning its second offering this year of bonds backed by auto loans receivables, according to Fitch Ratings.
The deal, Nissan Auto Receivables 2014-B Owner Trust, is sized at $885 million. Bank of America Merrill Lynch is the lead underwriter.
The trust will offer $179 million of Class A-1 money market notes that will be rated F1+’. Fitch expects to rate the class A1, A3 and A4 notes AAA’. The class A1 notes are due December 2015, the class A2 notes are due June 2017, the class A3 notes are dues May 2019 and the class A4 notes are dies March 2021.
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 (WA) Fair Isaac Corp. (FICO) score if loans backing the latest deal is 761; new vehicles total 92% of the collateal 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.