Nissan Motor Acceptance Corp. issued its second auto-lease securitization of the year — worth $1.3 billion — backed primarily by three-year lease contracts for new Nissan and Infiniti vehicles through franchised dealers.
While credit quality is improving, the securitization’s performance could be impacted by deteriorating residual values of off-lease vehicles, according to a presale report from Moody’s Investors Service.
The pool — Nissan Auto Lease Trust 2017-B — has a average weighted Fico score of 752, up from 747 in the captive’s previous auto lease ABS. However, NMAC’s managed portfolio’s residual value performance has shown a deterioration in recent quarters, according to the report.
Total losses on NMAC off-lease vehicles sold in the second quarter — as a percentage of the initial residual estimate based on Automotive Leasing Guide numbers — were 10.04%, which is lower than the 10.83% observed for the same period in 2016.
And much of that volatility comes from the Infinity brand. Losses climbed to $3,338 per vehicle in 2Q for Infinity cars and SUVs, up from $2,316 the year prior.
However, Moody’s still assigns a low 0.5% cumulative net loss (CNL) to the pool, which is in line with previous deals. “The low expected CNL for the 2017-B pool is mainly attributable to the continued strong credit loss performance of recent NMAC lease transactions and its managed portfolio,” Moody’s stated in the report. “In general, the expected CNL is derived from an analysis of the credit quality of the underlying collateral, historical performance trends, and the ability of NMAC to perform the servicing functions.”
NMAC had $21.6 billion in lease contracts outstanding as of June 30, up from $20.1 billion the same time a year prior. However, delinquencies did tick up for the captive. Total delinquencies 30-plus days past due reached 1.14% as of June 30, up from 1.01% a year prior.
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