Exeter Finance Corp. went public Wednesday with its $500 million asset-backed securitization today.
It’s the lender’s sixth securitization and it offers both senior and subordinate rated securities.
The class A notes were rated AAA/AA by DBRS and Standard & Poor’s, respectively, while the remaining three tranches were rated A/BBB and BB by both agencies. On a blended basis, the average annual coupon is around 2.64%. The notes have final scheduled distribution dates ranging from August 15, 2018 through Dec. 15, 2020.
Proceeds from the sale will be applied to reduce borrowings outstanding under the company’s existing three-year, $1.075 billion warehouse financing facility. The offering is expected to close on May 28, 2014.
Citigroup and Wells Fargo Securities acted as joint book runners on the transaction, with Deutsche Bank Securities and Goldman, Sachs & Co. participating as co-managers.
Earlier that day, a spokesman from Blackstone, which owns 90.57% of the company, told Auto Finance News that the equity firm is delighted results from Exeter.
He said the ABS deal had priced tighter than expected. He also said Blackstone would remain a partner with Exeter for the foreseeable future.
“We’re excited about the prospects the company has in front of it. We back the company for its growth plans,” he said adding that Exeter had been doing well, and they were excited about it.
It’s no secret that Exeter has been on a growth spurt over the past year.
The company saw its 2014 year-over-year managed portfolio grow by 103%, according to the DBRS pre-sale report.
The DBRS report said that this pool’s collateral has a weighted average seasoning of around three months and contains loans that were originated from Q2 2010 through Q2 2014, with around 79% of those loans originated since the beginning of Q1 2014.
The average remaining term of the pool is around 66 months. They have a weighted FICO score of 570.
As of March 31, Exeter had serviced a portfolio of around 138,000 loans with an aggregate outstanding balance of $2.22 billion according to the presale report from DBRS ratings agency.
Exeter has doubled its collection staff and enhanced its call center oversight over the past year. Also, this past April, Exeter launched a new customer website that provides customer service, online payment options, and electronic document capabilities.
The report said the company employs 433 in its collections and loan services. But the company has also been outsourcing a portion of its early stage delinquency collections to a Canadian company, and plans are to expand that relationship to include mid-stage delinquencies.
Exeter is planning to open its additional servicing center in Clearfield Utah, near Salt Lake City in June 2014. That space will have capacity for 400 employees.