A pool of prime auto loans will collateralize about $1.3 billion in asset-backed securities (ABS), from the Toyota Auto Receivables 2025-B Owner Trust.
With Toyota Motor Credit Corp. as sponsor, the deal will issue notes through five tranches of mostly class A notes, with a subordinate B tranche, according to S&P Global Ratings. Almost all the notes are fixed rate and are priced against the one-month I-curve, according to Asset Securitization Report's deal database. In a frequently used feature—the A2 tranche will issue a one-month, I-curve A tranche, and a floating-rate B tranche indexed to the one-month Secured Overnight Financing Rate (SOFR).
TAOT 2025-A's notes have maturity dates ranging from May 15, 2026 on the class A1 through Nov. 17, 2031 on the B notes, S&P said. Yields, meanwhile, are expected to come in at 4.4% on the class A notes, ASR's database said. Other yields are initially set at 4.5% on the A2 notes; 4.3% on the A3 class and 4.5% on the class A4 notes, according to the database.
While the current deal saw no notable structural changes from the TAOT 2025-A, there were some notable differences compared with the 2024-D series, S&P said. For one, the required yield supplement overcollateralization amount (YSOA) decreased to 8.0% from 8.35%, but the deal's annual excess spread levels are like the 2024-D notes.
The notes benefit from 2.75% in credit enhancement on the A1 through A4 tranches; and 0.25% on the B tranche, according to Fitch Ratings. Total credit enhancement on the notes is 6.3% and includes overcollateralization that reaches a target of 0.85%, a reserve account equaling 0.25% initially, and which will remain at that level for its target and floor amount. The notes also benefit from excess spread, equaling 3.06%.
S&P also noted that the deal's initial YSOA, as a percentage of the initial adjusted pool balance was 4.68%, down from 5.25%.
Barclays, BMO Capital Markets and JPMorgan Securities are among the list of managers, the ASR database also notes. The deal is slated to close on April 30.
S&P assigns A1+ to the A1 notes; and AAA to classes A2 through A4. Fitch assigns F1+ to the A1 notes and AAA to the A2 through A4 notes.
