Westlake Automobile Receivables Trust has returned to the market to raise $1.1 billion in auto asset-backed securities (ABS).
The fixed-rate notes will be issued through seven A, B, C, D and E tranches, and have decreased credit enhancement than a previous deal, due to some structural optimizations, according to S&P Global Ratings. Total initial hard credit enhancement on the A, B, C, D and E notes equals 41.5%, 34.05%, 23.40%, 13.90% and 9.5%, respectively. All of those were decreases from levels seen on the Westlake series 2024-2, the rating agency said.
Legal final maturities on the notes range from Oct. 15, 2025 on the A1 notes to Dec. 15, 2031.
Fitch assigns F1+ to the A1 notes; AAA to the A2 through A3 notes; AA+ to the class B notes; A to the class C notes; BBB to the class D notes and BB to the class E notes.
S&P assigns A1+ to the A1 notes; AAA to the A2 through A3 notes; BB to the class B notes; A to the class C notes; BBB to the class D notes; and BB to the class E notes.
Fitch Ratings analysts note that while the collateral has subprime credit attributes, the credit quality of the Westlake 2024-3 pool was incrementally better than the 2024-2 transaction, and notably better than the 2023-4 deal. In the present pool and on a weighted average (WA) basis, the underlying loans have a FICO score of 630, up from 619 in the 2023-4 deal. Further, this score is at an all-time high for the platform.
Also, the 114,972 collateral loans have no original terms greater than 72 months. On a WA basis the original term is 59 months, and their remaining term is 56 months. The loans have an average current principal balance of $14,786, with a WA annual percentage rate of 18.92%, and a loan-to-value ratio of 114.7%, according to Fitch.
Used vehicles account for almost all the collateral pool, at 97.8%. The pool is also geographically diverse, as Texas accounts for 17.17% of the pool. California, Florida, New Jersey and Illinois follow, accounting for 15.06%, 11.53%, 4.26% and 3.50%, respectively, Fitch said.
