TYSONS, Va.–PenFed Credit Union is reporting it has closed itsinaugural prime auto loan securitization offering PenFed Auto Receivables Owner Trust 2022-A (PAROT 2022-A). The transaction issued $460,292,000 of fixed-rate, amortizing asset-backed notes backed by prime auto loans, according to the credit union.
The securitization is a private placement offering, which in the United States is offered only to qualified institutional buyers under Rule 144A, the credit union stated. The asset-backed notes were offered in four senior and three subordinate tranches of notes and rated by S&P and Fitch.
“Entering the securitization market will reduce interest rate risk, increase liquidity and strengthen net worth,” said PenFed Credit Union President/CEO and PenFed Foundation CEO James Schenck.
The $36.6-billion PenFed noted it has the second-largest consumer loan portfolio among all credit unions across auto, personal, student, consumer loans and credit cards, and added that it also has one of the largest auto loan portfolios among federal credit unions, with originations across all 50 states and Puerto Rico.
‘Very Well Received’
J.P. Morgan Securities, LLC acted as the structuring lead manager of the transaction and Wells Fargo Securities, LLC, acted as joint lead manager.
“PenFed is pleased that the auto loan securitization offering was very well received by the market,” said PenFed Credit Union CFO and EVP Jill Streit. “We plan to leverage securitization as a tool to further diversify liquidity and funding options, adding additional protections for PenFed members.”
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