Auto leasing

Toyota Motor Credit Co. is sponsoring a $1.25 billion loan-backed transaction (potentially upsized to $1.75 billion), while regional Toyota captive finance lender World Omni Finance Corp. is sponsoring an auto-lease deal at either $766.5 million or $962.9 million.

Mercedes-Benz, Nissan and Ford will market up to $3.86 billion in new prime auto-lease securitizations, adding to a pipeline that opened up with Hyundai's deal last week.

Hyundai Auto Lease Securitization 2020-A will have a collateral pool with more than a quarter of underlying leases exceeding 43 months – compared to just 19.4% in its previous lease ABS transaction that priced last August.

Tesla’s sponsorship of the $940.95 million Tesla Auto Lease Trust 2019-A comes as the battery-electric vehicle (BEV) manufacturer has regained its footing with a surprise third-quarter profit and overcome recent manufacturing woes on its mass-market Model 3 vehicle.

According to presale reports, Mercedes-Benz Auto Lease Trust (MBALT) 2019-B will have only two months over the life of the deal in which there is more than a 5% concentration of expected lease maturities.

Loss expectations are up slightly for the second retail auto lease securitization of the year for RAC King the parent company of the regional “buy here/pay here” used-car chain American Car Center.

In the pool of 46,070 vehicles in the $1 billion pool or 59,863 in the $1.3 billion pool, none are equipped with diesel engines that were at the center of Volkswagen’s worldwide emissions scandal in 2015.

Regional Toyota captive finance lender World Omni has its highest-ever average FICO for a securitization of prime auto-lease receivables. But it also is pooling a portfolio of contracts that have a highly concentrated mix of lease maturities.

The $1.11 billion Ford Credit Auto Lease Trust (FCALT) 2019-B has 20.2% of the securitization value tied to leases with terms over 36 months – up from 14.4% in FCALT 2019-A. It's the largest percentage for a Ford lease ABS deal since 2014.

For the first time, the captive-finance lender has also opted to add SOFR-based benchmark rate "fallback" plans into one of its deals, which would stand in for one-month Libor should the London interbank offered rate becomes unavailable in 2021.

The agreement is expected to solidify a lending partnership whose status had been in doubt for more than a year. But it raised as many questions as it answered.

A DBRS report states rising concentrations of light-duty truck collateral adds risks to vehicle securitization portfolios, but risk may differ among ABS types.

With an expected March 20 closing, BMW's next lease securitization brings first-quarter deal volume to $6.5 billion, the highest three-month total in four years.

The captive lender is already underwriting and managing leases for GM electric cars in China; it is also buying and managing fleets for GM’s Maven ride-sharing program launched in the U.S. in 2016.

Some 35% of vehicles backing Driver UK Master Compartment 5 have diesel engines; presale reports do not indicate the percentage that meet more stringent EU emission standards.

More than 83% of the vehicle-lease value in Ford Motor Credit's $1.1 billion lease securitization is tied into trucks, minivans and utility models.

GM Financial is front-loading the $1.2 billion deal with early maturities, according to presale reports; Hyundai Capital is also readying a $710 million transaction.

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.

S&P considers the $1.034 billion lease securitization among the "most diversified" in lease-end concentrations, limiting the impact of future declines in residual values as cars come off lease.

The transaction's note size is to be determined, but is backed by €750M in lease-backed receivables, compared to €1.5 billion in VW's most recent German lease ABS in May.