Braunschweig, January 12, 2016
Volkswagen Financial Services securitise Chinese auto loans for the third time
- Tightest ABS transaction in China ever
- Receivables volume totals around three billion renminbi
- Around 53,000 automobile credit contracts securitised
Volkswagen Financial Services have sold Chinese Auto ABS (Asset-Backed Securities) to investors for the third time. The securitisation transaction Driver China three, which is backed by vehicle financing contracts from Volkswagen Finance China, has a volume of around three billion renminbi (RMB), or approximately 419 million euros. In a volatile market environment the order books were fully covered during the bookbuilding process, with orders placed by both, Chinese and international investors; tranche A was placed at a fixed interest rate of 3.30% and tranche B at 5.10%. The order books were oversubscribed 2.41 times for the Class A notes and 2.10 times for the Class B notes at placement pricing levels. This makes Driver China three the Auto ABS transaction with the lowest pricing in China ever.
"With China Driver three as an opening transaction for Volkswagen Financial Services to kick off the new financial year, we are significantly expanding our refinancing volume in renminbi generated by Auto ABS," says Frank Fiedler, CFO of Volkswagen Financial Services AG. As regards the further international rollout of the diversification-based refinancing strategy, Fiedler adds: "We will be expanding our refinancing volume via Auto ABS in the international arena as planned and will be introducing our familiar ABS programme into further currency areas over the next few years."
With the transaction, the company securitised a diversified pool of receivables from around 53,000 financing contracts. The average outstanding financed value per vehicle amounts to around RMB 57,000, or approximately EUR 7,400. In addition to local ratings, the transaction has also been given international ratings and bears the quality label "Certified by TSI – deutscher Verbriefungsstandard" from True Sale International GmbH.
The following tranches were placed:
- RMB 2.632 billion Class A notes,
Local rating: CCXI/CCRC [AAA/AA+]
International rating: Fitch/Moody's/S&P [AAsf/Aa3sf/AAsf]
- RMB 157 million Class B notes,
Local rating: CCXI/CCRC [A+/A]
International rating: Fitch/Moody's/S&P [A-sf/Baa1sf/BBBsf]
The marketing of the transaction was carried out by the lead underwriter CITIC Securities Co., Ltd and the co-lead underwriter Bank of China Limited. The Bank of Tokyo-Mitsubishi UFJ (China), Ltd acted as financial advisor.
Information for editors
Volkswagen Financial Services are a business division of the Volkswagen AG group of companies and comprise Volkswagen Financial Services AG along with its associated companies and the financial service companies in the USA, Canada, Argentina and Spain that belong directly or indirectly to Volkswagen AG – with the exception of the financial services of the Scania and Porsche brands and Porsche Holding Salzburg. The key business fields embrace dealer and customer financing, leasing, the bank and insurance business, fleet management and mobility offers. Volkswagen Financial Services have a total of 12,821 employees worldwide – including 6,254 alone in Germany (as at: 31.12.2014). The Annual Report 2014 of Volkswagen AG reported total assets for Volkswagen Financial Services of around EUR 137.4 billion, an operating result of EUR 1.7 billion and a portfolio of around 12.4 million current contracts.
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Volkswagen Financial Services