A joint venture involving the captive finance arm of French automaker PSA Peugeot Citro'n and Santander Consumer UK is issuing its first UK auto financing securitization since gaining regulatory approval for operations there.
Auto ABS UK Loans PLC is a two-class notes structure totaling £1.31 billion, featuring floating- and fixed-rate notes backed by receivables of contract sales and personal contract purchase (or leases) of new and used vehicles sold through UK Peugeot and Citro'n dealers.
The notes are split between a Class A £1.06 billion notes tranche and a deferred interest Class B tranche of notes totaling £125 million. The notes have provisional ratings of ‘AAA’ (Class A) and ‘A+’ by Standard & Poor’s. There is also an unrated £125 million fixed-rate tranche of subordinated notes.
There will be a 2.3% reserve account for the outstanding principal balance for each of the rated tranches.
The loans in the pool have an outstanding balance of £1.37 billion, with an average balance of £7,227 after a seasoning of 14.2 months, with average remaining terms of 28.5 months.
The portfolio consists of 67.4% of new vehicle receivables, with 60.6% involving PCPs. More than half (51.5%) of the car loans and leases in the collateral are for Peugeot models.
Auto ABS UK Loans PLC is a UK-based special purpose entity created through the merger of Banque PSA’s wholesale finance and retail finance businesses. Santander acquired a 50% stake in the company in February 2015 to create the joint venture.
At the time of the Santander purchase, PSA Peugot Citro'n announced the partnership had gained approval to begin operations in the UK and France, with nine other countries planned for expansion.
