A large credit and savings association serving the agricultural market in Spain is marketing nearly €900 million in bonds backed by loans to consumer and small businesses, according to DBRS.
Cajamar Caja Rural S.C.C. is securitizing about 27,300 loans with a total original balance of €1.13 billion, with more than half related to proceeds for farming and agricultural use.
Four tranches of notes will be issued in the transaction: €602.7 million in Class A notes with a provisional rating of AA from the DBRS and €226.4 million in Class B notes carry a BBB rating; DBRS is not rating the Class C and D notes also included in the deal, according to an agency press release.
The Class A notes benefit from 38.8% credit enhancement, including subordination and a €19.1 million cash reserve account.
The weighted average life of the portfolio is 4.17 years. For the Class A notes, DBRS applied a 43.1% recovery rate for the secured loans and 17% for the unsecured loans, according to the release.
Banco Santander arranged the transaction.
DBRS assumed a weighted average probability of default of 2.15% for the portfolio.
Cajamar is a top rural savings and credit association in Spain, with 1.3 million members and 3.6 million customers served by more than 1,000 branches, according to the company’s website. It has €42.7 billion in assets.
