Ford Credit is preparing a securitization deal worth $1.6 billion in prime auto loans. According to a presale report from Fitch Ratings Services, new vehicle loans make up about 89.4% of the pool, the highest ever reported in a securitization by Ford Credit.
The securitization is comprised of seven tranches, including Class A-1 notes valued at $359.2 million with a final maturity date of April 15, 2016; Class A-2 notes worth $546.4 million with a final maturity date of January 15, 2018; and Class B notes worth $47.4 billion and a final maturity date of August 15, 2020.
The weighted average Fico score of the loans is 731. Longer loan terms make up about 44.7% of the loans, with terms of 61 months or more. The weighted average annual percentage rate is 3.78%.
The securitization could provide a boost to Ford Credit’s income. During the fourth quarter of 2014, pre-tax profits for Ford Credit totaled $423 million, up $55 million from the year-ago quarter. The company credited higher volume offset by lower lease residuals for the lift in profits. While profits saw gains, Ford Motor Credit saw a decline in its fourth quarter income to $411 million, a sharp fall from $568 million reported during the fourth quarter of 2013.