Finance
American Honda Finance prepares to sell up to $2.1 billion in prime auto ABS
A securitization of retail installment auto loan contracts, extended to prime-quality borrowers, amounting to about $1.5 billion, and potentially increasing to $2.1 billion is being marketed to investors through the Honda Auto Receivables 2024-1 Owner Trust.
Due to close shortly, the transaction will issue notes through four tranches of class A notes, according to ratings analysts at Moody’s Investors Service. Regardless of the issuance amount—the deal could be $1.4 billion, $1.8 billion or $2.1 billion—all of the notes benefit from total hard initial credit enhancement representing 2.75% of the portfolio securitization amount at closing. That is composed of a non-declining reserve fund of 0.25% and 2.50% of the initial pool balance, the rating agency said. The deal also benefits from excess spread.
As for pricing expectations, the A1 notes are expected to price at par, with a 13 basis-point spread over the three-month interpolated yield curve, according to Asset Securitization Report‘s deal database. Otherwise, spreads on the A2 notes are expected to land at around 44 basis points over the benchmark through 77 basis points over the A4 notes.
Known as HAROT 2024-1, the transaction will repay investors sequentially.
As the notes are all class A, with maturity dates of Feb. 18, 2025 on the A1 notes; Sept. 15, 2026 on the A2 notes; Aug. 15, 2028 on the A3 notes and May 15, 2030 on the A4 notes, Moody’s said.
American Honda Finance originated the underlying contracts, Moody’s said. It will also service the notes, an arrangement that Moody’s considers one of the deal’s main credit strengths, given that it is highly rated, stable and has more than 20 years of securitization experience. Other credit strengths include strong credit attributes in the collateral itself, including a weighted average (WA) FICO score of 768 for all three of the pools. The pool has a high ratio of tier A loans, 77.4% for all three pools, a few notches better than the HAROT 2023-4 transaction, which saw a 77.1% concentration of tier A loans, the rating agency said.
MUFG Securities Americas, Barclays Capital,
All of the notes scored triple-A ratings from both Moody’s and S&P Global Ratings, except the A1 notes. For those, Moody’s assigned a P1 rating, and S&P gave an A1+ rating.
DALLAS, Dec. 24, 2024 /PRNewswire/ — NexPoint Real Estate Finance, Inc. (NYSE: NREF) (the “Company”) today announced a dividend for its 8.50% Series A Cumulative Redeemable Preferred Stock (NYSE: NREF PRA) of $0.53125 per share. The dividend will be payable on January 27, 2025, to stockholders of record at the close of business on January 15, 2025.
About NexPoint Real Estate Finance, Inc.
NexPoint Real Estate Finance, Inc., is a publicly traded REIT, with its common stock and Series A Preferred Stock listed on the New York Stock Exchange under the symbol “NREF” and “NREF PRA,” respectively, primarily focused on originating, structuring and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common equity investments, as well as multifamily and single-family rental commercial mortgage-backed securities securitizations, promissory notes and mortgage-backed securities. More information about the Company is available at nref.nexpoint.com.
CONTACTS
Investor Relations
Kristen Griffith
IR@nexpoint.com
Media Relations
Prosek Partners for NexPoint
pro-nexpoint@prosek.com
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SOURCE NexPoint Real Estate Finance, Inc.
US stocks opened higher to kick off the final, shortened trading session before the Christmas holiday. The benchmark S&P 500 (^GSPC) edged up about 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) rose roughly 0.3%. The Dow Jones Industrial Average (^DJI) hugged the flatline.
Wall Street is looking to enter its Christmas break rejuvenated, after tech stocks including AI chip giant Nvidia (NVDA) led the march higher on Monday. Markets close at 1 p.m. ET today and are off tomorrow for Christmas Day.
Sizable gains on Friday and Monday have put the indexes back on the path toward their record highs, from which they took a Fed-fueled nosedive last week.
Wall Street is reassessing the path of interest rates next year as it grapples with the reality that the Fed mostly pulled off a so-called soft landing — but couldn’t fully shake the US economy’s inflation problem. According to the CME FedWatch tool, most bets are on two coming holds at the Fed’s January and March meetings, followed by a toss-up in May.
Meanwhile, many eyes continue to be trained on Nvidia, which saw a more than 3.5% gain on Monday. As Yahoo Finance’s Dan Howley writes, 2024 was Nvidia’s year, with the stock up some 180%. But 2025 could contain plenty of challenges.
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China’s finance ministry reaffirmed it will increase public spending with a greater focus on boosting consumption to support the economy next year, ahead of growth headwinds from looming US tariffs.
China will “expand the magnitude of fiscal spending and accelerate the spending pace,” according to a statement published Tuesday following a two-day national conference held by the Ministry of Finance on fiscal work in 2025.
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