Prime auto ABS

Market conditions allowed for a larger bond issuance, as well as interest rate pricing that was less than half that of the coupons the captive-finance lender offered investors from its prior May issuance of auto loan asset-backed securities.

JPMorgan Chase, which has an $18.4B prime auto-loan portfolio, has not ventured into the securitization market with publicly rated auto-loan collateral since 2006, according to ratings agency reports.

Seven-year loans make up over 10% of the latest pool of originations from Santander's Chrysler Capital division, nearly a tenfold increase from the prior issuance from the shelf.

The Fed's TALF program to support AAA-rated ABS securities issuance continues to resonate in the prime auto securitization space.

S&P Global Ratings has projected slightly higher investor loss levels for BMW Financial Services' first 2020 auto-loan securitization, compared to the captive-finance auto lender's previous deal in 2019. But that loss range (0.9%-1.11%) still remains minimal.

The captive-finance lender for General Motors is providing lower expectations for the vehicles' future residual values, compared to its prior lease ABS deals, in recognition of the likely severe recessionary impact of the coronavirus outbreak.

Ratings agencies are projecting slightly increased bond losses for American Honda Finance Co.’s next billion-dollar auto-loan securitization.

VW Credit becomes the seventh lender to offer asset-backed bonds since the Federal Reserve announced TALF backing of prime auto ABS notes to support stimulus efforts for the COVID-19 ravaged market.

Ford Motor Credit has emerged with a new issuance of auto-loan backed securities, joining a select group of prime auto ABS issuers confident in drawing in investors despite a gloomy, pandemic-afflicted outlook for the automotive industry.

Over 236,000 prime and subprime vehicle-loan borrowers received payment deferrals of between 30 and 120 days during the early economic turmoil of the coronavirus pandemic, according to the ratings agency.

The new-issue pipeline of prime auto loans remains open despite the gloomy forecasts for pandemic-related stresses on auto sales and consumer unemployment levels.

Weakening fortunes in the auto industry from the COVID-19 pandemic is prompting elevated loss expectations for a new-issue portfolio of prime automobile loans originated and serviced by Hyundai Capital America.

GM Financial's next auto-loan securitization is expected to have more front-loaded losses due to pandemic-related stresses

American Honda Finance's 78th term securitization has a potential upsizing to $1.62 billion - a similar option the captive-finance lender has taken in recent transactions.

Credit unions have seized share in auto lending. It may not be long before the same happens in auto ABS.

The Ford Credit Auto Owner Trust 2020-REV1 transaction is Ford’s 12th under its platform that permits revolving assets during the pre-amortization period of the transaction.

The lease deal – Santander’s sixth ABS of Chrysler Capital leases since 2017 – has a higher proportion of leases with original terms longer than 36 months (44.5%) than prior deals through the platform.

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.

Macro factors point to a solid year in the securitization market but wild cards abound, many of them political.