Auto leasing

The deal benefits from lower credit enhancement requirements after pooling higher FICOs and more seasoned contracts; but residual values continue to decline for the German automaker.

The captive-finance lenders will be the leading issuers of U.S. auto lease-backed securitizations in 2017 at the close of their latest deals launched this week.

More than 88% of contracts in the $800 million transaction have terms of less than 40 months; Fitch points to the increased the use of subvention at Toyota dealerships.

The average FICO for the pool of lease obligors is at a peak level for GM Financial's shelf, but Fitch expects higher losses on resale values on a pool more heavily dependent on longer-term leases and luxury models.

For the first time, the collateral includes lease contracts from its standalone Genesis luxury sedan line; two models, the G80 (base price $41,000) and G90 (base price $68,000) account for 4% of the total pool balance.

The sponsor is pooling what a majority of customers are buying these days, but future gas-price shocks could depressed used-vehicle prices on the lower MPG models.

Moody's thinks that the risk of early lease terminations is "marginal," since only 0.5% of the vehicles in the collateral pool are old enough to be impacted by bans in place in several European cities.

Despite riskier terms, rising delinquencies and falling used car values, investors keep buying bonds backed by prime and subprime auto loans and leases.

Credit support on the senior tranche of the $800 million transaction is 19.25%, up 250 basis points on the comparable tranche of the sponsor's previous deal to offset the impact of falling used car prices.

Nissan’s deal is backed by loans and will be sized at $1 billion or $1.3 billion, depending on demand. Hyundai Capital’s $1 billion transaction is backed by leases ranging from 24 to 48 months.

Nearly 52% of the pool in the captive-finance company's first 2018 vehicle-lease securitization involves contracts for popular crossover models like the Chevrolet Equinox, the GMC Acadia and Cadillac XT5.

Over 94% of the collateral pool consists of diesel-engine vehicles, even though diesel cars have had waning interest among French drivers in the past decade.

The Detroit company recorded an 11% increase in car loans and leases originated during the fourth quarter, as well as a jump in yields. Ally appears to be benefiting from Wells Fargo's substantial retrenchment in auto lending.

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 deal is the first vehicle loan securitization for the London affiliate of South Africa's FirstRand Group since November 2016.

BMW Financial Services is launching its first U.S. auto-loan securitization in two years, while Daimler AG's U.S. captive finance arm is proposing a $1.3 billion to $2 billion pooling of luxury auto leases.

Citing the dim financial outlook for a business it entered just six years ago, the Wayzata, Minn., company will stop making auto loans on Dec. 1.

The €309 million Orbita Funding 2017-1 plc follows a 2016 transaction by the venerable British bank.

To compensate for weakening used car prices, Hyundai has lowered the base residual value, or the amount it expects to be recovered when cars come off lease and are resold.

The hurricanes destroyed hundreds of thousands of cars, and banks are significantly boosting their reserves in anticipation of higher defaults on auto loans. But there is also a silver lining for auto lenders.