Tesla

In a potential credit drawback, TALT 2024-B has a residual value setting of 51.3% of the manufacturer's price. It was less than 50% in all the 2023 lease securitizations.

The transaction's credit enhancement levels are lower than what was seen on the 2023-A pool, but is still strong, and is still high compared with peer transactions.

The pool has a 25% concentration limit for electric vehicles, up from 15% from Series 2023-5. This increases risks to the transaction, because residual values on those types of cars are still unknown.

Tesla features prominently in the collateral, representing 41.73% of receivables from borrowers with higher FICO scores than the overall pool.

The $1.18 billion deal is also the first to include Tesla’s mid-range Model Y vehicle (with an MSRP of $54, 119) that makes up 36% of the securitized value of the TALT 2021-A pool, according to a presale report from Moody’s Investors Service.

The electric car maker was able to offer less credit enhancement on the senior tranche of notes to be issued because residual value accounts for less of the collateral than its prior deal.

It's deep and liquid, and spreads are tight. To many, a deal with a few idiosyncratic risks — not to mention cool factor — just offers a chance to pick up a little extra yield.

The single-B rated company is facing a large cash requirement as it ramps up production of its Model 3; but leases backed by electric vehicles pose additional risks for investors in asset-backeds.

The new deal is smaller, at $130.1 million, and the collateral is almost entirely of PV systems financed through third-party loan agreements.

While the company still relies heavily on sales of solar panels, these purchases are now funded by third-party lenders, rather than in-house.