Toyota Motor Credit Corp. is back with the second ever “green” auto loan securitization.

The $1.25 billion Toyota Auto Receivables 2015-B is backed by the same mix of collateral as Toyota’s previous securitization, completed in February. The difference is that proceeds will be ring-fenced to finance the purchase or lease of gas-electric hybrid or alternative fuel vehicles, according to a regulatory filing.

Credit Agricole, Citigroup, and Bank of America Merrill Lynch are joint bookrunners on the deal.

The transaction will offer four senior tranches and one subordinate level class of asset-backed notes. Standard and Poor’s has assigned a preliminary ‘A-1+’ rating to the $355 million class A-1 money market notes due June 15, 2016. The remaining senior tranches consisting of $400 million class A-2a/A-2b notes due November 15, 2016, $360 million A-3 notes due May 15, 2019, and $103.75 million A-4 notes due September 15, 2020 are all rated ‘AAA.’

There are also $31.25 million of class B notes, rated ‘AA+’, that will reach final maturity July 15, 2021, according to the presale report.

The notes are backed by a pool of prime auto loans with a weighted average FICO score of 757 and weighted averaged seasoning of 15.4 months. The class A and class B notes benefit from 7.3% and 5.2% credit support, respectively.

Proceeds from the offering will be used exclusively to finance following models: Avalon Hybrid, Camry Hybrid, Prius, Prius c, Prius Plug-in and Prius v; Lexus CT 200h and Lexus ES 300h. 

It’s been more than a year since Toyota completed its first green auto loan securitization in March 2014. At the time, Adam Stam, manager of ABS and structured finance at Toyota Financial Services told ASR that the lender expected to be able to put proceeds from the deal to work within a few months. He also said that Toyota planned to issue more green bonds and hoped that its competitors will as well.

So far, however, none have followed suit.

That may because the initial green auto loan securitization didn’t provide cheaper funding, despite attracting some new investors. It priced in line with conventional deals in the market at that time from other automakers.

Stam told ASR that reducing funding costs was not the primary goal, however.  “We really didn’t do it because we thought there was going to be a big price differential; it was to further Toyota’s environmental profile, and because investors wanted it,” he told ASR in the 2014 interview.

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