Auto ABS

FCAT 2023-1 has a stronger collateral pool composition than a recent transaction, with a lower concentration of loans from indirect origination sources.

Initially, the notes have 25.50% of over-collateralization (OC) of the initial pool balance, and that is expected to build to a target OC level of 35.00%.

Of the leases underpinning the deal’s collateral, just 0.2% are closed-end, wherein the trust would bear the wholesale market risk.

The current deal has a discounted residual value of securitization of 54.8%, lower than the 56.8% present in the 2015-A pool.

Dealers are in solid financial health, school buses secure 20%-35% of notes, and Navistar Financial has never had a bus dealer bankruptcy in its history.

First Help Financial is a small, niche auto lender with less than $500 million in assets, adding variability to expected loss scenarios on the notes.

The offering is the latest securitization in the fertile automobile ABS market

Both used and new cars make up the collateral in COPAR 2022-1

The subprime auto lender has a good track record, but there are concerns about used-car prices normalizing, according to KBRA.

The most profitable and largest used-car retailer has had more than a dozen ABS in the last four years.

KBRA says the Southern subprime used-vehicle retailer’s experience brings credibility to the space

Proceeds from the deal will purchase the loan assets and fund the reserve account.

Lendbuzz closed a new $100 million committed warehouse facility, with a 12-month revolving period, and will bring its total warehouse capacity to $400 million.

Sport utility vehicles (SUVs) represent 26.6%—and 26.7% if upsized—of the deal’s underlying portfolio, compared with 13.0% from the 2022-1 securitization.

CRVNA 2022-P1 has a collateral pool with annual gross excess spread of 3.41%, compared 5.6% with from the 2021-P4 deal, due to the lower collateral interest rate.

Underpinning the notes are two special units of beneficial interest in leases owned by an origination trust, issuer’s rights under any letters of credit.

The current state of the car market, which is sending sales and prices of used cars spiking, could pose a credit challenge to the notes.

The deal is secured by loans on new and used vehicles and that largely follows the structure of recent transactions, particularly the 2021-C.

This deal appears to be the first since the Netherlands-headquartered multinational acquired First Investors in an all-cash transaction finalized last November.

The collateral pool is comprised of receivables assets based in Japan, and several classes of the transaction will issue dollar-denominated notes.