Ford plans to switch to new $ 1.1 billion revolving auto ABS deal


Ford Motor Credit is sponsoring a new $ 1.1 billion auto loan securitization, which could grow to over $ 1.51 billion, backed by a five-year revolving pool of blue chip retail contracts.

Ford Credit Auto Owner Trust 2021-REV1 is the first revolving securitization sponsored by the captive financial subsidiary of Ford Motor Co. since last October. Ford also securitizes blue chip loans through its standard shelf which offers static pools of auto loans.

Ford has issued 13 previous revolving transactions, eight of which are still in their renewal period.

The pool consists mainly of new contracts (a concentration of 92.5%) for the purchases of automobiles, trucks and SUVs through Ford dealers. While most of the loans are 60-month long-term loans, the percentage of 61-84 month loans decreased to 64.7% of the pool from 69.7% in the previous revolving securitization issued by Ford Credit. .

Loans between 72 and 84 months remained 8% of the pool, but the weighted average FICO in this tranche fell from 734 to 727.

The 2021-REV1 pool has similar credit characteristics to other Ford preferential loan agreements, such as a WA FICO of 736 and long loan seasoning (8.6 months).

The transaction includes four classes of notes, including a $ 1 billion senior Class A tranche (or up to $ 1.5 billion if increased) supported by an initial credit enhancement of 9.5 % as well as an excess difference to be determined.

Fitch Ratings and S&P Global Ratings have assigned preliminary AAA ratings to the Category A tranche.

The capital stack also includes the first Class D subordinate tranche for a FordREV shelf transaction.

The baseline scenario for Fitch’s credit loss on the transaction is 2.55%. S & P’s expected losses are between 3% and 2.6%.

BofA Securities is the main underwriter.

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