USAA Federal Savings Bank has made its typically once-a-year contribution to the ABS pipeline, with a $500 million securitization offering, backed by prime auto loans, according to a presale report from Standard & Poor’s.
The loans in the trust have a weighted average Fico of 739, a weighted average seasoning of 16 months, and an original term of 66 months. The trust also contains loans with terms greater than 72 months for the first time, with 4.88% of the loans with terms of 79 to 84 months. Those loans are mostly for new vehicles and have a Fico comparable to the overall pool at 736 versus 739, according to S&P.
Taking into consideration USAA’s past securitization performance, the bank’s managed portfolio performance, and 12 years of “origination static pool performance data,” S&P expects the cumulative net losses for the pool to be in the 0.60%-0.80% range.
The ratings agency also noted that unlike most auto ABS securitizers, USAA directly originates vehicle installment loans as opposed to buying them indirectly from auto dealers, and also completes the entire contracting process electronically.
“The electronic contracts are electronically signed by the related obligors and are in an electronic vault maintained by the bank or third parties,” S&P wrote in the report.
USAA was founded in 1922, and provides various financial products and services – including auto loans, personal loans, motorcycle and boat loans, and recreational and leisure vehicle loans — to military members and their families.