Porsche Financial Services' PFAST shelf is preparing to sell $717.9 million in asset-backed securities (ABS) to investors, with series 2025-1 of the Porsche Financial Auto Securitization Trust.
The trust will market five tranches all A-class notes, A1 through A4, to investors, according to Moody's Ratings. The A2 and A3 tranches will issue the bulk of the note volume, a combined $529 million, and they have a legal final maturity date of March 22, 2029.
PFAST 2025-1 will have to navigate a market where the underlying consumers are facing increased challenges from tariff-induced higher prices and a loosening labor market.
All the notes have a total initial hard credit enhancement level representing 2.75% of the outstanding note balance, and that structure includes a non-declining reserve fund representing 0.25% of the pool balance, according to Moody's Ratings.
Lead underwriters includes RBC Capital Markets,
The receivables are of a strong credit quality, with the obligors having a weighted average (WA) FICO score of 781. That score also happens to be on the higher side compared to peer transactions that were recently rated, Moody's said.
On a cumulative basis, Moody's expects a net loss of 0.60% for the PFAST 2025-1, and a loss at a Aaa stress of 4.50%, which is lower than the prior transaction.
Yet the deal has several challenges, beginning with underlying loans that had original terms of 84 months. About 83% of the loan balance had an original term between 61 and 72 months, with an original term of 71 months. That term is at the higher end among peer captive auto loan securitizations.
On average, the loans have a balance of $105,628, which is more than double the level of peer auto loan securitizations. Almost 89% of the dollar value of receivables that support the notes are accounts where the loan balances exceeds $60,000.
While the obligors are of prime credit quality, the trust is backed completely by luxury vehicles. To further concentrate the risk, the pool contains a limited number of vehicle models. The 911, Cayenne and 718 models account for more than 79% of the pool receivables, Moody's said.
