News
Swiss auto debut announced
Multilease is prepping a debut Sfr297m auto lease ABS. Dubbed First Swiss Mobility 2017-1, it is a 32-month revolving cash securitisation of auto lease contracts extended to obligors in Switzerland.
The underlying assets are financial leases extended to mainly private lessees. The residual value cashflows have a dealer buy-back guarantee from either independent or Emil Frey Group car dealers in Switzerland. Multilease is a fully owned subsidiary of Emil Frey.
The collateral pool has an average lease balance of Sfr16,873 across 720 dealers. There is geographic concentration in Zurich (13.94%), Vaud (13.78%) and Ticino (9.55%). The main car manufacturers are Toyota at 26.53%, Land Rover at 15.05% and Subaru, representing 10.79% of the pool.
Moody's and S&P have both assigned provisional ratings to the transaction respectively of Aaa/AAA on the Sfr260.7m class A notes, A1/AA- on the Sfr22.2m Class Bs and Baa2/BBB+ on the Sfr14.10m class Cs. There is 10% overcollateralisation at Sfr33m, as well as a 2.1% reserve fund for each note.
Among the credit strengths highlighted by Moody's is the granular portfolio composition, with the largest lessees representing 0.17% and 0.73% of the pool. It points out that there are no additional maintenance or other service obligations associated with the pool.
The rating agency also notes that the cumulative default rate is around 1% of the original loan balance, while the recovery rate is around 58% and the monthly delinquency rate is less than 0.7%. Furthermore, 31% of the contracts are fully amortising leases, which tend to be contracts with fairly low residual values.
Credit weaknesses of the transaction include Multilease being an unrated entity and a first-time originator and servicer, as well as commingling of cashflows to the servicer. Moody's notes too that there is a high dependency on the Emil Frey Group, which owns 60% of the car dealers providing the dealer guarantee to cover residual value risk. The issuer account rate on balances over Sfr17.5m is also linked to the Swiss National Bank reference rate, which is currently at -0.75%.
Credit Suisse is arranger on the transaction.
15/03/2017 13:22:18
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