MIAMI — World Omni Financial Corp. heated up the securitization pipeline for the second time this year with a $941.5 million transaction, according to a presale report from Fitch Ratings Agency. However, the transaction showed a high percentage of extended-term loans, and slightly weaker credit quality, according to Fitch.
The issuance — which closed Sept. 14 — still garnered “broad investor interest,” said Bryan Romano, assistant treasurer at World Omni Financial Corp. “In general, demand for auto ABS continues to be strong,” Romano told attendees at IMN ABS East 2016 in Miami. World Omni’s 2016-B transaction “was well-received by the market,” he said, and specifically in the A-1 tranche.
The World Omni Auto Receivables Trust 2016-B — backed by retail installment loans on new and used cars and light-duty trucks manufactured primarily by Toyota Motor Corp. — also had the lowest percentage of new vehicles since 2012. The percentage of new versus used vehicles are 90% and 10%, compared with 95% and 5% in the 2016-A trust.
The weighted average Fico score is 719, a decrease from 722 in 2016-A, according to the report. However, while the average Fico is at its lowest since 2008, “approximately 58% of the pool have Fico scores at or above 701, down from 59% in 2016-A and 61% in 2015-B,” Fitch said in the report.
WOART 2016-B has a weighted average original term of 70.1 months, up from 69.9 months in the 2016-A transaction. “Loans with original terms greater than 60 months total 81.1% in 2016-B, the highest to date in a WOART pool,” Fitch said in the report.
Check out the video below for Romano’s full response to investor demand, World Omni’s latest securitization, and how the auto ABS market is fairing currently:
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