Toyota Motor Credit is issuing it second round of securitizing U.S. captive-finance auto loans this year through its Toyota Auto Finance Receivables trust in what could be between a $1.2 billion to $1.6 billion notes offering, according to a federal registration filing Wednesday.
Toyota Auto Receivables 2016-B will initially be comprised of six classes of notes that will have an initial pool size of $1.2 billion, which could be increased to $1.6 billion. The initial principal amounts include $337 million of short-term Class A-1 money-market notes, and a floating/fixed-rate split of $368 million in Class A-2 notes due 2018. The Class A-3 notes sized at $362 million will mature in 2020, and $103 million in Class A-4 notes are due 2021.
A $30 million, six-year Class B notes structure is also part of the transaction.
Should Toyota choose to boost the size of the transaction to $1.6 billion, the tranches will increase to $446 million (Class A-1), $490 million in aggregate Class A-2a/2b notes; $134 million in A-4 notes and $40 million in Class B notes.
Toyota Motor Credit is expecting triple-A ratings from Moody’s Investors Service and Standard & Poor’s for four of the tranches of Class A notes, as well as preliminary “Prime-1” (Moody’s) and “A-1+” structured finance ratings for the money-market notes.
Joint bookrunners on the transaction are Citigroup, Lloyd Securities and RBC Capital Markets.
The split between the Class A-2 notes will be determined at pricing, with the fixed-rate A-2b notes not to exceed $276 million under the $1.2 billion structure; at $1.6 billion, the A-2b amounts will be no more than $367.5 million.
Toyota auto Finance Receivables or its affiliate will retail approximately 10% of each of the class of notes.
The deal is to close in May.
The pool sized at $1.2 billion will be comprised of fixed-rate retail installment contracts for passenger cars, trucks, minivans and sports utility vehicles branded under Toyota, Lexus or Scion. The total principal balance of the receivables is $1.28 billion through 75,390 loans with an average principal balance of $16,937. The weighted average APR of the loans is 2.12% and an average customer FICO score of 755 (with scores ranging between 620-883).
Toyota could bump up the pool size to $1.7 billion if it expands the securitization to 100,329 receivables, with roughly the same credit quality and seasoning.
The Toyota receivables transaction follows two months after Toyota Motor Credit marketed $1.25 billion of securities through its 2016-A owner trust issuance. That deal featured slightly higher FICO scores of 757.