Prime auto ABS

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.

CarMax Auto Superstores is securitizing a “slightly improved” pool of prime auto loans in its new $1.2 billion loan-backed securitization, according to S&P Global Ratings.

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.

GMF’s $1.269.9 billion asset-backed transaction will be secured by a pool of loans that has a slightly lower weighted average FICO, higher collective LTV and longer average terms compared to prior deals issued via GMF’s securitization platform.

According to Moody's, Ally's latest auto-loan ABS will not require the issuer to repurchase loans with modified terms or maturities.

According to Moody's, Ally's latest auto-loan ABS will not require the issuer to repurchase loans with modified terms or maturities.

The ratings agency's monthly auto loan ABS index tracker shows losses and 60-plus-day delinquencies decreased both month-over-month and year-over-year.

New proposed securitizations from American Honda and Ford Motor Credit, plus a U.S.-dollar denominated ABS transaction sponsored by Scotiabank, will push total securitization volume of prime auto ABS to nearly $52 billion - the highest yearly volume in the sector in seven years.

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.

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.

Deutsche Bank analysts said the newly downgraded junk status for Ford and its captive-finance subsidiary could mean more dependence on securitization to offset expected higher bank financing costs.

Ally Bank, Capital One Auto Finance and BMW Financial Services of North America launched new note offerings, which will add to the year-to-date of $35.2 billions across 32 prior deals.

Captive finance lenders in recent years have been steadily reliant on used cars for asset-backed collateral. That’s not the case with American Honda Finance Corp.