Volkswagen Bank said today that it sold two tranches from its Driver Thirteen, a German auto loan securitization, at the lower end of price talk.
The 1.9-year, AAA’ rated 691 million ($791 million) tranche A was sold at 25 basis points over one month Euribor. The 2.4-year, A’ rated 25 million class B notes priced at 65 basis points over one month Euribor, according to a company press release. DBRS rated the deal.
The order book was oversubscribed 2.85 times for the class A notes and 1.9 times for the Class B notes.
The securitized portfolio consists of a pool of 54,000 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.