OneMain Finance is preparing to sell $500 million in asset-backed securities (ABS), from a pool of direct auto loans, and coming to market through the OneMain Auto Receivables Trust, 2025-1.
The loans have fixed rates ranging from 10%-36%, with a maximum loan amount up to $100,000 and original loan terms up to 78 months, according to ratings analysts at Kroll Bond Rating Agency.
ODART 2025-1 will be the first transaction from the program that will include loans originated through OneMain Foursight, the lending unit that was formed when OneMain bought Foursight Capital from Jefferies Financial Group in April 2024. They will represent 10% of the pool balance, as of the initial cut-off date, Dec. 31, 2024.
Structurally, ODART 2025-1 will have a five-year revolving period, when the trust can purchase new collateral that meets the transaction's eligibility and reinvestment criteria, according to KBRA.
ODART 2025-1 will sell the fixed-rate notes through four tranches, with legal final maturity dates of April 16, 2035, Oct. 15, 2035 and July 14, 2037 on classes A; B and C; and D, respectively. The class A, B, C and D notes carry initial credit enhancement levels of 30.2%, 19.7%, 12.2% and 3.2%, respectively, KBRA said.
The program has several potential credit drawbacks, according to rating agencies. Among them is that the current pool will include OneMain APP loans, which are sourced through auto dealers that use DealerTrack, DealerCenter and RouteOne lending programs. One mitigating factor, though, is that OneMain APP loans have accounted for 7.8% of the OneMain auto loan portfolio as of Sept. 30, 2024.
KBRA assigns AAA; AA+; AA and AA- to classes A, B, C and D, respectively. S&P assigns AAA; AA; A and BBB- to the A, B, C and D classes, respectively. DBRS assigns AAA to classes A and B; and A and BBB to the C and D classes, respectively.
