Toyota Motor Credit Corp.’s second “green” auto loan securitization provides further proof that investors won’t pay up to finance hybrid vehicles or alternative fuel vehicles.
Spreads on the notes issued by the $1.25 billion Toyota Auto Receivables 2015-B are wide of those on its inaugural green deal, completed over one year ago, but in line with recent conventional deals from other automakers.
The class A2A notes pays 21 basis points over the Eurodollar synthetic forward curve and class A2B notes pay 21 basis points over one-month Libor. The 2-year, class A3 notes priced at 25 basis points over interpolated swaps and the 3.23-year, class A4 notes priced at 31 basis points over interpolated swaps curve. Moody’s Investor Service and Standard & Poor’s assigned triple-A ratings to the notes.
By comparison, on Toyota Auto Receivables 2014-A, completed in April 2014, the issuer paid 13 basis points over the Eurodollar synthetic forward curve on the 1-year, class A-2 tranche; the 2.06-year, A-3 tranche yielded 15 basis points over the interpolated swaps curve; and the 3.17-year, class A-4 tranche yielded 22 basis points over the interpolated swaps curve. S&P and Moody’s rated the bonds triple-A.
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.
However the short-dated, senior notes priced tight of Ford Credit Auto Owner Trust 2015-B, the last benchmark issue to price on May 19. Ford paid two basis points more than Toyota on the senior classes. The one-year class A2A notes priced at 23 basis points over EDSF and the 1-year, class A2B notes priced at 23 basis points over one month Libor.
On the longer dated, senior notes, Toyota sold its bonds several basis points wider relative to Ford. Ford paid three basis points less on both the 2.25-year, class A3 notes, which priced at 22 basis over interpolated swaps; and the 3.36-year class A4 notes, which priced at 28 basis points over interpolated swaps. Ford’s senior notes are rated triple-A by Fitch Ratings DBRS and S&P.
In an interview with ASR last year, Adam Stam, manager of ABS and structured finance at Toyota Financial Services, 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.”