Volkswagen AG issued its second securitization via the new True Sale Initiative securitization platform established by 13 banks and the True Sale International GmbH (see ASR 12/6/04). The 1 billion ($1.2 billion) Driver 2 transaction led by BNP Paribas and WestLB includes a three-year revolving period - a feature not present in Volkswagen's inaugural TSI issue.

"It improves the overall costs for the issuer when compared to Driver 1," said a source familiar with the deal. "From a practical point of view it was a very smooth transaction. The driver transactions demonstrate TSI works well with auto loans and it's a template that can be used by other large-volume originators [which] might not have their own programs in place."

The TSI group has been behind much of the heavy lobbying seen in Germany to change legislation in order to facilitate the structuring of true-sale securitizations. To date, Volkswagen has been the only issuer to use the platform but market sources say that now that the structure has been tested, paired with the overall improved legislative environment, its likely that more originators will seek the comfort of the already established structure rather than strike out alone. "With the TSI platform, the logistics are all in place - standard documentation and the structure has the added benefit of being pre-checked and rated by the agencies," said one market source.

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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