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.
Today’s installment of campaign-related news items from across the country.
* When it comes to campaign finance laws, both parties’ campaign committees have faced restrictions on how much money they could spend in coordination with candidates’ campaigns. Those limits are now effectively gone.
As MS NOW’s Jordan Rubin explained, “The Supreme Court’s GOP-appointed majority ruled for Republicans in their campaign finance challenge to restrictions on political parties spending on ads with input from the party’s candidate.”
A Punchbowl News report added that the ruling, written by Justice Brett Kavanaugh, “handed Republicans a massive win” and is likely to “usher in the biggest change to campaign finance law since the Citizens United decision.”
The same report went on to note that Tuesday’s high court ruling “allows for unrestricted coordination between candidates and party committees. That means committees, like the NRSC or the DCCC, can run unlimited TV ads with allied candidates. More importantly, they can also buy those ads at the much cheaper rate offered to candidates. … Tuesday’s SCOTUS ruling will also eradicate the need for independent expenditure arms at party committees.”
Republicans already enjoyed a significant financial advantage over Democrats. The Republican-appointed justices just made it easier for the GOP to capitalize on that advantage.
* In Colorado’s closely watched Democratic primaries, incumbent Sen. John Hickenlooper fended off a challenge from the left, but some of his colleagues weren’t as fortune: Democratic socialist Melat Kiros ended long-serving Rep. Diana DeGette’s career in Denver’s congressional district, while state Attorney General Phil Weiser scored a major upset by defeating incumbent Sen. Michael Bennet in a gubernatorial primary.
* In the race for North Carolina’s open Senate seat, former Democratic Gov. Roy Cooper leads former Republican National Committee Chairman Michael Whatley in the latest New York Times/Siena poll, 50% to 43%, pointing to a possible pickup opportunity for Democrats.
Google Cloud and FactSet, a provider of data and artificial intelligence solutions to the financial markets, plan to jointly develop AI agents designed to assist with portfolio operations, deal advisory and corporate finance.
Tuesday’s Supreme Court ruling changing certain federal campaign finance limits could make a big difference in the battle for control of Congress this fall, giving Republican candidates who have been getting outraised by opponents direct access to more party cash.
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