Auto ABS

S&P Global Ratings has projected slightly higher investor loss levels for BMW Financial Services' first 2020 auto-loan securitization, compared to the captive-finance auto lender's previous deal in 2019. But that loss range (0.9%-1.11%) still remains minimal.

Nissan Motor Acceptance Corp. recently filed a prospectus with the SEC to issue $1.3 billion in a mix of fixed- and floating-rate notes, and quickly priced the offering for coupons significantly lower than its $1 billion transaction in late April.

The changes in terms on Byrider Finance’s subprime auto ABS deal compared to its predecessor illustrate how the COVID-19 pandemic is taking its toll.

Driven Brands is preparing a $175 million asset-backed securities deal that will provide investors with exposure to a relatively safe industry during the coronavirus pandemic.

Subprime auto ABS market participants do not see its outlook worsening significantly as a result of the pandemic, but most anticipate losses.

Westlake Automobile Receivables Trust 2020-2 pools a portfolio of loans for mostly high-mileage used-vehicles financed by the privately held Westlake through independent and franchise dealers. The deal includes a $370.9 million triple-A tranche (as preliminarily rated by S&P Global Ratings and DBRS Morningstar) that benefits from 42.75% initial credit enhancement.

Potential COVID-19 stresses include a rising tide of unemployed borrowers missing payments and seeking extensions, as well as falling used-car values.

The captive-finance lender for General Motors is providing lower expectations for the vehicles' future residual values, compared to its prior lease ABS deals, in recognition of the likely severe recessionary impact of the coronavirus outbreak.

Global Lending Services, a subprime auto lender that has ramped down its expansion plans for 2020 amid the coronavirus outbreak, is proceeding with its second auto-loan securitization of the year.

Exeter, DriveTime and CPS last week joined a small club of subprime auto lenders sponsoring ABS deals since their TALF eligibility was announced.