MIAMI — Toyota Motor Credit Corp. is “laying the groundwork” for what it hopes will become a public lease securitization program, National Manager of Secured Funding Adam Stam told attendees at IMN ABS East 2016.
Currently, TMCC only has a public retail securitization program, where the captive issues transactions backed by retail installment contracts, Stam said. TMCC started to securitize leases in private bank conduit transactions in 2012 — a securitization wherein a bank buys all the debt issued by the securitization trust. The debt then goes into a bank-sponsored commercial paper conduit, Stam explained.
Bank conduits typically buy securitization debt from multiple issuers, and they use this as collateral to issue asset backed commercial paper (ABCP) — which is a short-duration debt backed by all the assets that the bank conduit has purchased from different issuers.
“From our standpoint, the private ABCP deals help us get ready for starting a public lease ABS program, because they require the same IT systems development and investor reporting capabilities that we will need for a public lease ABS program,” Stam said.
