For the second time this year, The Finance Company was in the market with an auto loan ABS via WestLB, sources said. The approximately $63 million transaction is backed by sub-prime auto loans, and contains a single tranche insured by Radian Asset Assurance. The series 2002-2 Rule 144A transaction is rated double-A by both Fitch Ratings and Standard & Poor's.
The deal, which priced last week, is the fifth securitization in the last four years for TFC. Settlement is scheduled for the week of Oct. 14. In March, TFC sold a similar subprime auto-loan ABS, also via WestLB.
Founded in 1977, Norfolk, Va.-based TFC specializes primarily in making auto loans to enlisted military personnel through independent auto dealers. TFC is known for its unique collections policy, in which the company receives direct payments from the salaries of military personnel. Loans are typically made to coincide with the term of enlistment. TFC also lends to subprime civilian consumers, but to a lesser extent.
A WestLB source stated that the company expects to bring three additional auto loan transactions to market by year's end. In addition, WestLB has been mandated on several other transactions in asset classes including timeshare and healthcare receivables, non-performing mortgage receivables, and small business loans.
WestLB, on the heels of its mortgage servicer-advance securitization success and the oversubscribed Frontier Leasing specialty equipment securitization, continues its focus on underwriting off-the-run transactions in some esoteric assets within the ABS market.