Ford Securitization Deal Tops $1.3 Billion
Ford Motor Credit Company is starting 2015 by preparing a massive securitization deal worth $1.35 billion in prime auto loans. It is expected to close on Jan 21. According to a presale report from Standard and Poor’s, the average weighted Fico score for the loans is 731, up from 726 during Ford Motor Credit’s previous securitization.
The weighted average APR for the pool of loans decreased to 3.74% from 4.11%.
The securitization has three tranches; Class A notes valued at $1.25 billion, with a preliminary S&P AAA rating and a final maturity date of July 2026; Class B notes worth $50.68 million with a AA rating, maturing July 2026 and class C notes with an S&P preliminary A rating valued at $50.68 million, with the same expected final maturity date of July 2026.
Among notable changes from Ford Motor Credit’s most recent deal was an increase in the percentage of new vehicles. S&P reported that the percentage of new vehicles made up 89.6% of the current deal, up from 88.5% in the previous issuance. The percentage of long term contracts, meaning loan terms above 60 months, was 44.3%, a slight increase from 41.9% in the previous securitization.
Prime loans mean low repo rates, and in 2014 Ford Motor Credit celebrated historically low repossession levels. During the second quarter of 2014, the company had 0.98% repossessions, down from 1.08% in the year-ago quarter. It was the lowest rate in the company’s history.
