Volkswagen Bank announced a €717 million ($138 million) auto loan securitization issued under the sponsor’s auto loan receivable program in Germany.

On offer under Driver Thirteen’s capital structure are €691.5 million of ‘AAA’ rated class A notes and €25.5 million of ‘A’ rated class B notes. The notes have been assigned preliminary ratings by DBRS. Initial credit enhancement is 9.0% for the class A notes and 5.6% for the class B notes.

The securitized portfolio consists of a pool of auto loan receivables to retail and commercial customers secured by new and used vehicles.

The loans in the pool have a weighted average original term of four years, and auto loans representing new vehicles make up 54.94% of the receivables. The loans have weighted average payment history of 7.59 months.

VW Bank’s retail portfolio has continued to grow from an average of €15 billion for 2013 to €17.36 billion at the end of September 2014, according to DBRS' presale report. Since 2010, there has been an ongoing shift in the portfolio mix with new car balances falling from a peak of 63% to 56% as at September 2014. The shift to include a greater percentage of used loans has been a result of the company’s strategy to increase penetration rates for used car financing.

Citigroup and Lloyds Bank have been mandated to lead the deal. It is expected to price Jan. 21.  

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