Stellantis Financial Services is bringing its second deal of 2026 to market, selling $518.3 million in securitized bonds backed by payments from retail installment contracts.
The pool of assets is a mixed bag of new and used vehicles for consumer and commercial use, according to Kroll Bond Rating Agency analysts. The transaction, First Investors Auto Owner Trust, series 2026-2, will sell the notes through six tranches of class A through D notes.
Notes are due on dates ranging from Oct. 15, 2027 on the K1+ tranche to Oct. 16, 2034 on the notes rated BBB+, KBRA said.
Senior notes, classes A1, A2 and A3, with K1+, AAA and AAA ratings, respectively, all have the same level of credit enhancement, 37.15%, KBRA said. Subordinate classes B, C and D, with ratings of AA+, A+ and BBB+, respectively, benefit from credit enhancement levels of 30.80%, 23.00% and 14.65%.
Most of FIAOT 2026-2's vehicle finance contracts, 69%, originated through Stellantis' Captive Program, which allows small business owners to purchase commercial vehicles for personal or business use, KBRA said.
The Commercial Program accounted for 29.5% of the pool, and the Legacy Indirect and Legacy Direct Programs accounted for 0.60% and 1.0% of the pool, respectively.
By the cutoff date, August 31, borrowers in the Captive and Commercial programs had non-zero weighted average (WA) FICO scores of 649 and 660, respectively.
FIAOT 2026-2 will repay noteholders sequentially, lending subordination to the structure. The notes benefit from initial overcollateralization representing 13.65% of the pool balance, initially. Target O/C will be the sum of 14.20% of the outstanding pool balance and 2.00% of the initial pool balance.
There is also a cash reserve account equaling about 1.00% of the initial pool balance, and excess spread of 2.85%.
On average, the loans have a balance of $46,549, KBRA said. On a weighted average (WA) basis, the contracts have an interest rate of 10.69%.
Geographically, the pool is diversified, with Texas (16.27%), Florida (8.37%) and California (6.81%) representing the largest share of the loans.
