First Investors plans to issue $220 million from its subprime auto loan securitization trust, according to DBRS.
The deal is the issuer’s third of the year. Six tranches will be offered. The $29.5 million of money market notes, rated R-1’ by DBRS are due Nov. 16, 2015. The trust will also offer $148 million of AAA’ rated class A notes which will be offered over two tranches. The class A2 notes are due Nov. 15, 2018 and the class A3 notes are due Nov. 16, 2020.
At the junior level, the trust will offer $10 million of AA’ rated class B notes and $17 million of A’ rated class C notes that are both due Nov. 16, 2020. The trust will also sell $15 million of BBB’ rated class D notes due Feb. 15, 2022.
First Investors Auto Owner Trust 2014-3 is structured similarly to the issuer's 2014-2 deal, which priced in August. The weighted average FICO score for the FIAOT 2014-3 transaction is 584, up from 582 in the previous deal and the weighted average remaining term is 68 months, similar to the previous deal.
However, the AAA’ rated notes are structured with credit enhancement at 20.8%, an increase from the previous deal which was structured with credit enhancement at 19.8%.
First Investors is an independent consumer finance company that purchases dealer-originated auto loans from the sale of new and used vehicles (indirect auto loans) and makes auto loans directly to consumers to refinance an existing auto loan (direct auto loans). Direct loans have historically performed better than indirect loans.
Of the latest transaction’s collateral, 38.67% was originated through the drect channel, while 61.33% was originated through the indirect channel.