Toyota Motor Credit is preparing to sponsor a transaction to issue $900 million in asset-backed bonds through the Toyota Lease Owner Trust 2024A, in a deal slated to close by the end of the month.
Crossover utility vehicles (CUV) make up a majority of the pool, at 61.9%, while cars accounted for 26.5% of the transaction's securitization value, according to ratings analysts at S&P Global Ratings. The underlying monthly leases had 36 original monthly payments on a weighted average (WA) basis, with 25.9 months remaining, according to S&P.
A large majority of the pool, 82.40%, had original lease terms that were equal to or less than 36 months, while leases in the 36-42 month band represented 9.79% of the pool, and 7.81% of the pool had leases in the 43-48 month range. Meanwhile, the leases in the collateral pool had a WA FICO score of 771, the company said. The rating agency noted that the notes benefit from total hard target credit enhancement of 16.50%, with an estimated 4.02% in estimated excess spread per year, S&P said.
The current transaction will issue notes off of the smallest collateral pool in the program since the TLOT 2021A, by lease count, at 33,135, according to the rating agency. Also by securitization value, California, Texas, New York and Florida account for 18.54%, 13.49%, 11.32%, 7.42%, respectively.
TLOT 2024A will issue the notes through five tranches of class A notes. More than likely all of the notes will be fixed, while the A2B notes could issue floating-rate notes. S&P assigns ratings of A1+ to the A1 notes, while the A2 through A4 notes will be rated AAA, according to S&P.
Further, the notes have legal final maturity dates of Feb. 20, 2025 to the A1 notes; June 22, 2026 to the A2A and A2B notes; April 20, 2027 to the A3 notes and June 20, 2028 to the A4 notes, according to the rating agency.
