Prime auto ABS

From efforts to fix the London interbank offered rate to changes in online lenders' funding programs, here are some of the highlights of the Structured Finance Industry Group's 2018 confab in Sin City.

The transaction is the second this year involving Santander's Chrysler Capital preferred-lender unit; in January Santander sold bonds on its first-ever deal backed by Fiat Chrysler leases.

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.

Timothy Bowler, president of the ICE Benchmark Administration, which has been responsible for calculating the index since mid-2013, argues that there is a strong case for keeping it going.

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.

For the fifth time since early 2016, American Honda Finance is hedging on oversubscribed demand for its prime-loan receivables-backed notes with a potential upsizing.

The transaction is backed by nearly three times as many Audi, Volkswagen and Skoda as VW's previous UK auto-loan ABS; it also features a longer revolving period.

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.

It's deep and liquid, and spreads are tight. To many, a deal with a few idiosyncratic risks — not to mention cool factor — just offers a chance to pick up a little extra yield.