Volkswagen has continued securitizing loans since the emissions scandal broke last year.

A new Spanish auto loan securitization is coming down the pike.

The deal, for a total €723.8 million, is backed by Volkswagen-originated loans to retail and small-commercial segments in Spain, according to a presale from Standard & Poor’s.

An A tranche, for €643.5 million, is rated ‘AA+’ and a €21.7 million B tranche is rated ‘A+.’ The deal also includes an unrated subordinated loan for €58.6 million.  

Called DRIVER ESPANA THREE, the deal will be the third public securitization in Spain from Volkswagen Finance.

Supporting the ratings are overcollateralization, a subordinated loan—to be retained by VW Finance, and for the A tranche subordination from the B tranche.

About 34% of the underlying pool by volume financed cars equipped with diesel engines that were affected by the company’s notorious manipulation of exhaust emissions. S&P has taken this into account when calculating the potential resale value of these cars.

An investigation by the Environmental Protection Agency prompted Volkwagen to admit last September that is had doctored emissions test on millions of cars worldwide.

A tad over 95% of underlying borrowers in DRIVER ESPANA THREE are consumers; companies account for the remaining share.

The bulk of the loans—some 82.86%—were used to finance new cars. The Spanish region with the highest share of the securitized loans by volume is Catalonia, accounting for 20.2%.

Volkswage is an active securitizer in the European auto market.

S&P said that the company’s “track record of stable, strong-quality asset origination is among the best of all European auto ABS originators.”

The lead managers of the deal are BNP Paribas, Citigroup Global Markets and Volkswagen Financial Services.

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