Securitization of retail installment auto loan contracts for highly qualified borrowers could total approximately $1.5 billion, potentially increasing to $2.1 billion, sold to investors through Honda Auto Receivables 2024-1 Owner Trust has been done.
Expected to close soon, the deal will issue debt through four tranches of Class A notes, according to rating analysts at Moody's Investors Service. Regardless of the issuance amount (the transaction could be $1.4 billion, $1.8 billion, or $2.1 billion), all notes are subject to aggregate hard initial credit enhancement equal to 2.75% of the portfolio securitization value at closing. benefit from. This amount initially consists of 0.25% of the pool balance and a 2.50% non-depreciable reserve, the rating agency said. This trade also benefits from excess spread.
In terms of price expectations, A1 bonds are expected to be priced at par, with a spread of 13 basis points on the three-month interpolated yield curve. Asset securitization reporttrading database. Otherwise, the spread for A2 bonds is expected to be approximately 44 basis points above the benchmark and 77 basis points above A4 bonds.
The transaction, known as HAROT 2024-1, will be repaid to investors in stages.
All of the Notes are Class A and the A1 Notes have a maturity date of February 18, 2025. September 15, 2026 in A2 notes. According to Moody's, the date will be August 15, 2028 for A3 notes and May 15, 2030 for A4 notes.
Moody's said American Honda Finance prepared the underlying agreement. It will also service debt securities, which Moody's views as one of its key creditworthiness for the transaction, given its high and stable ratings and more than 20 years of securitization experience. Other creditworthiness includes the strong credit attributes of the collateral itself, including a weighted average (WA) FICO score of 768 for all three pools. This pool has a high proportion of Tier A loans, at 77.4% across all three pools, which the rating agency says is several notches better than the HAROT 2023-4 deal, which had a concentration of 77.1% Tier A loans. Stated.
MUFG Securities Americas, Barclays Capital,
All bonds, except the A1 bond, received triple-A ratings from both Moody's and S&P Global Ratings. For these, Moody's assigned her a P1 rating and S&P gave him an A1+ rating.
