Volkswagen Bank plans to securitizey €952 million ($1.3 billion) of German auto loans from its Driver series.

The deal, Driver Twelve, will be rated by DBRS and Moodys Investors Service. The ratings agencies expect to rate the €922 million, senior notes, ‘AAA’/ ‘Aaa’. The notes are structured with 9% credit enhancement. The €30.5 million class B notes are expected to be rated ‘A’/ ‘A1’ and have 5.95% credit enhancement. Both tranches are due June 2020.

Raiffeisen Bank International and RBC Europe are the joint lead managers on the deal. VW Bank is acting as originator, servicer and cash manager of the transaction.

The portfolio to be securitized consists of a auto loan receivables to retail and commercial customers secured by new and used vehicles. The pool includes 52,091 loans and is collateralized by 52.78% new cars, 13.78% demo vehicles and 33.44% used cars.  

The loan product “AutoCredit” accounts for 84.47% of the securitized portfolio. “AutoCredit” loans have equal installments during the life of the loan and a larger balloon payment at loan maturity, according to the Moody’s presale report. The borrower must pay the entire loan including the final balloon installment.  

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