Westlake Services has priced the upsized the $320 million Automobile Receivables-Backed Notes Series 2014-1 — its first securitization of 2014, according to a person familiar with the deal.
JP Morgan Securities and Credit Suisse are the lead underwriters on the deal, which was originally sized at $275 million. RBS and Wells Fargo are the co-managers.
A $113 million money market tranche with a preliminary A-1’ rating from Standard & Poor’s has a coupon of 0.35%.
A $116.14 million tranche of class A2 notes, which are rated AAA’ and have a weighted average life of 1.03-years, priced at 45 basis points over the eurodollar synthetic forward curve.
A $26.35 million tranche of 'AA'-rated notes with a WAL of 1.65-years priced at 85 basis points over the eurodollar synthetic forward curve.
Further down the capital strucutre, a $34 million tranche of A’ rated class C notes with a WAL of 2.05years priced at 120 basis points over the interpolated swaps curve; and a $30.6 million tranche of BBB’-rated notes with a WAL of 2.30 years, priced at 160 basis points over the interpolated swaps curve.
The deal is Westlake’s fifth securitization to date. Compared with the previous deal, completed in 2013, the collateral backing this deal has a higher weighted average loan to value of 104.41%, versus 101.37%; the percentage of receivables with an original term of 49-72 months has also increased to 17.20% from 7.64%.
The percentage of borrowers with a FICO score of 660 and above increased to 10.9% from 9.8%, according to S&P.
S&P increased its expected cumulative net loss range for the transaction to 11%-12% from 10%-11% on the 2013-1 transaction because losses on Westlake's managed portfolio are trending higher.