Volkswagen Financial Services will tap Spanish auto loan receivables in its upcoming Driver securitization.

The deal, Driver Espana Two, will offer €723.7 million ($820.6 million) of bonds. Standard & Poor’s and Moody’s Investor’s Service have assigned preliminary ratings of ‘AA’/ ‘Aa2’ on the class A notes and ‘AA’/ ‘A2’ ratings on the class B notes.

The bonds are structured with a legal final maturity date of August 2026 and have a weighted average life of 1.84 years.

Volkswagen has only issued two other Driver securitizations backed by Spanish auto loan receivables. However the Spanish securitization program leverages off the sponsor’s world-wide securitization experience gained over the last 17 years with numerous well performing transactions.

The transaction structure is very similar to previous auto loan ABS from Volkswagen Group in Germany, France and the UK; but unlike those deals, the Spanish transactions won't include a revolving period.

And unlike most other Spanish auto loan transactions, all contracts securitized benefit from retention of title in favor of the originator.

The loans in the Spanish securitization pool have an average 42.57 months remaining term and have on average paid installments over 13.53 months.

On Wednesday, Volkswagen priced £453 million ($697 million) of bonds backed by U.K. auto loan receivables. The transaction called Driver U.K. three, issued class A notes, rated  triple-A by Moody's, S&P and DBRS, that pay 1-month Libor plus 50 basis points and class B notes, rated single-A, that pay 1-month Libor plus 95 basis points.

The bonds have a legal final maturity of January 2024.  At closing the Driver U.K. will also issue an unrated subordinate loan.

Credit Agricole and Lloyds Bank were the joint lead managers on the deal.

The transaction is structured with a six-month revolving period during which the sponsor can add additional loan receivables to the pool of collateral.


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