After approaching the $1 billion securitization threshold last summer, Westlake Financial Services surpassed the mark, according to an announcement shared earlier this week.
Westlake issued its largest asset-backed securitization (ABS) of $1 billion backed by approximately $1.1 billion of automotive paper.
Vice president of finance Sean Morgan highlighted this move is Westlake’s largest securitization ever issued with an expected annualized coupon of 3.28 percent.
“Westlake’s past securitizations continue to perform, and the company is growing profitably, promoting investor loyalty and sparking interest from new investors,” Morgan said.
“With a weighted average credit spread 1.12 percent, we were on average over 30 basis points tighter than our last deal for comparable tranches,” he added.
The transaction was led by JP Morgan (structurer), Wells Fargo and Bank of Montreal.
Executives also mentioned this is the company’s first transaction to offer a single-B rated Class F tranche, which added an additional $57 million and brought Westlake’s advance rate to 97 percent.
Westlake chief financial officer Paul Kerwin explained why the company made that move.
“Our focus in 2018 is to continue to gain market share across the credit spectrum,” Kerwin said. “The liquidity cushion provided by our ABS investors has enabled us to expand our financing options to near prime and prime credit customers in recent years.
“Based on our growth trends we expect to be back in the market in Q2 of 2018,” Kerwin went on to say.
Westlake Financial Services continues to experience growth through its nationwide dealer network. The company is active in all 50 states, including Puerto Rico, with a dealer base of more than 20,000 franchise and independent dealerships.
Westlake’s current portfolio of $6.2 billion includes originated auto installment contracts and leases, portfolio purchases and dealer floor plan lines of credit.