Auto ABS

Auto loan delinquencies and defaults had performed well thanks to federal intervention. Analysts expect them to return to historic levels, and then stabilize.

All of the underlying leases are financing new cars, Fitch noted, adding that leases under 36 months for the original term represented about 82.3% of the pool.

World Omni Financial Corp. is returning to the auto-loan ABS market with a jumbo transaction backed by collateral of higher credit quality than other similar deals.

From the interest rates on the underlying vehicle leases to the benchmark and hedges on the notes issued from the trust, the deal has no Libor exposure.

In a first for the EART program, the collateral will include loans originated through a third-party direct lender.

Credit enhancement ranges from 24.7% on the most senior class of notes to 1.5% on the most subordinate class.

Despite the auto sector's resilience in recent economic quarters amid the pandemic, observers remain watchful of employment trends and waning government help.

For the current transaction, excess spread is at about 5.65% annually, which is in line with the 5.8% in the 2021-NR series of notes.

Used autos are in high demand, because the COVID-19 pandemic caused production delays that constrained the supply of new vehicles to the market.

World Omni Auto Receivables Trust continues to focus solely on Toyota models, and has the potential to issue up to $1.1 billion in notes.