Hyundai Capital America is the first out of the gate to offer an auto-backed securitization in the new year, according to pre-sale report from S&P Global.
ABS issuances are expected to be slow in the first quarter, due to the new enforcement measures of Reg AB II, which requires issuers to disclose asset-level data about borrowers, both S&P and R.J. Carlson, partner at Sidley Austin LLP, told Auto Finance News previously.
However, HCA didn’t have to provide the more granular data because it was a 144A transaction, an S&P spokeswoman told AFN.
The HCA transaction is backed by prime auto lease receivables and is expected to close on January 18. While HCA has issued several auto loan securitizations in the past, this is the company’s 12th auto lease transaction and it’s structured similarly to previous issuances, S&P said.
Securities issued total $810 million against 45,687 leases, the report states. The average original lease term in the pool is 39 months, with 60% of leases signed for 36-month terms and 35% signed to 48-month terms. The weighted average Fico score is 744.
HCA has “substantially” grown its managed portfolio since 2010, S&P noted. In 2010 the company reported $1.6 billion in lease contracts outstandings and by year end 2016 has grown that portfolio to $15.8 billion. That’s also a $2 billion increase over the previous year, which totaled $13.8 billion in outstandings.
The portfolio’s average delinquency rate has also dropped slightly in the last year to 1.20% from 1.25%, S&P added.
Based on this information, S&P expects the pool’s cumulative net credit loss to range from 1.10% to 1.30% of the pool’s securitization value.
