Toyota and Nissan are marketing a combined $2.5 billion of bonds backed by retail auto loans.

The $1.25 billion Toyota Auto Receivables 2016-C Owner Trust will issue a $345 million money market tranche and three other senior tranches with preliminary ‘AAA’ ratings from Standard & Poor’s that benefit from initial credit enhancement of 2.75%. Similar to prior TAOT transactions, the class B notes are principal-only and will not receive interest payments.

MUFG Securities is the lead underwriter.

Overall, the series 2016-C collateral pool's credit quality is similar to series 2016-B, according to S&P. Approximately 78% of the obligors by balance have FICO scores greater than 700. While 31.1% of the pool's loans by principal balance have original terms of 61-72 months, only 14.4% have remaining terms of that duration because of seasoning. The collateral pool includes no loans with original maturity terms greater than 72 months or borrowers with FICO scores below 620.

$1.25 billion Nissan Auto Receivables 2016-C Owner Trust features a smaller money market tranche, $296 million, and three classes of term senior notes with preliminary ‘AAA’ ratings from Fitch Ratings and 4.25% credit enhancement. There are no subordinate notes.

Wells Fargo Securities is the underwriter.

The collateral composition and credit quality of 2016-C are generally consistent with those of prior pools, according to Fitch. The weighted average (WA) FICO score is 774, and new vehicles total 91%. At 98.7%, this pool has the highest concentration of Nissan brand vehicles. The pool is also geographically diverse.

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