Weekly Wrap: Toyota reverts to auto lease securitization after “long hiatus”


A Moody’s Investors Service report this week noted that Toyota Motor Credit Corp. (TMCC) reverts to automatic leasing securitization “after a long hiatus”.

How long? Toyota’s time away from the ABS 144A auto rental market dates back to the Clinton administration.

According to rating agency reports and documents filed with the Securities and Exchange Commission, the $ 1.19 billion Toyota Lease Owner Trust (TLOT) 2021-A (via JPMorgan Securities) is the first rated audience since 1998 to uniquely group auto lease receivables managed by Toyota in the United States. captive financial branch.

TMCC, based in Plano, Texas, is a leading issuer of blue chip automatic loan securitizations. In the past year, its trusts issued $ 10 billion in industry-leading bonds backed by new and used car loan contracts issued by U.S. Toyota dealers. TMCC has sponsored more than 50 retail installment-backed securitization trusts since 1993, according to rating agency reports.

The TLOT 2021-A agreement “is TMCC’s first automotive leasing securitization on the TLOT platform. However, TMCC has sponsored three auto leasing securitizations in the past and has provided over 10 years of quarterly origination static pool performance data broken down by different segments, ”the S&P Global report said.

Other lenders have included new Toyota and Lexus leases in lease securitizations, including World Omni Corp., which serves as a regional finance company serving Toyota dealers in five southeastern states. World Omni priced a $ 1.1 billion ABS lease in February.

Additionally, in 2014, TMCC issued a “green” bond offering that collected proceeds strictly for installment loan contracts and rentals of gasoline-electric hybrid vehicles and alternative fuel powertrains under the Toyota brands. and Lexus.

The deal follows a huge increase in first-quarter new car sales for U.S. Toyota dealers. Toyota saw a 22% increase in global auto sales in the first quarter, according to Bloomberg, as customers flocked to showrooms for models like the Rav4 crossover and popular Tacoma midsize pickup.

In a presentation to investors in February, Toyota said that for fiscal 2021, it sponsored $ 7.4 billion in public asset-backed securities and 144A, as well as $ 10.9 billion in private ABS deals. . account for 41% of the $ 44.9 billion in global term debt financing.

Moody’s and S&P Global have issued preliminary AAA ratings for the three tranches of TLOT 2021-A term notes: one $ 395 million Class A-2 tranche due September 2023; $ 368 million in Class A-3 bonds due April 2024 and a $ 95 million Class A-4 offering due August 2025.

A $ 142 million Class A-1 money market tranche is rated Moody’s P-1 and S&P A-1 +, the highest short-term ratings for each.

The pool is made up of 41,403 prime car rental receivables, with contracts of 36 months or more, representing 73.3% of the pool in securitization value. No lease is for more than 48 months.

S&P and Moody’s both set low credit loss expectations of 0.5% on the transaction.

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