Volkswagen Financial Services issue auto ABS in euros

  • Transaction meets the STS criteria
  • Tranche A is central bank eligible
  • Auto ABS contribute 19 percent to refinancing
Braunschweig, 30 October 2020. Volkswagen Financial Services have placed an asset-backed security (ABS) transaction with a volume more than one billion euros secured by leasing receivables of Volkswagen Leasing GmbH. A total of two tranches were placed with investors, which were several times oversubscribed. With this transaction, the company has securitized a preliminary diversified pool of receivables from more than 88,000 leasing contracts of Volkswagen Leasing GmbH. The issuance meets the quality criteria stipulated by the EU Regulation on STS (simple, transparent and standardized) securitization. These STS quality criteria are checked by Prime Collateralised Securities (PCS), a verification body authorized by the German Federal Financial Supervisory Authority (BaFin). Almost two percent of the securitized leasing contracts are for electric vehicles.

Tranche A (ISIN: XS2242731185) has a volume of EUR one billion and ratings from Fitch and Standard & Poor’s (AAAsf/AAA(sf)). It was placed at a price of 1-month Euribor plus 21 basis points and was oversubscribed 1.65 times. In addition, the securities can be deposited with the European Central Bank as eligible collateral.

Tranche B (ISIN: XS2242732662) was placed at a price of 1-month Euribor plus 110 basis points. It is also rated by Fitch and Standard & Poor’s (AA-sf/AA-(sf)). The volume amounts to EUR 24.1 million. Tranche B was oversubscribed 1.2 times.

At the end of June 2020, asset-backed securities issues amounting to EUR 41.2 billion accounted for around 19 percent of the refinancing for Volkswagen Financial Services. Other significant constituents of the funding mix were bonds with a figure of almost EUR 55 billion (around 25 percent) and customer deposits with EUR 32 billion (around 14 percent).
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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, Volkswagen Bank GmbH, Porsche Financial Services, and the financial services companies in the USA and Canada that belong directly or indirectly to Volkswagen AG – with the exception of the financial services of the Scania brand 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 16,571 employees worldwide – including 7,414 alone in Germany. Volkswagen Financial Services report total assets of around EUR 223.5 billion, an operating result of EUR 2.96 billion and a portfolio of around 21.5 million current contracts (as at: 31.12.2019).

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