Mercedes and BMW First to Market in 2015

Mercedes Benz Financial Services USA and BMW Financial Services LLC were the first auto lenders to come to market with securitizations in 2015, with two new issuances backed by auto lease contracts.

The Mercedes Trust 2015-A totals $1.67 billion with a weighted average seasoning of 11 months and a weighted average Fico of 782 and is among the strongest of all securitized lease pools in the U.S., according to a pre-sale report from Moody’s Investor Services. Of the trust’s 39,985 lease contracts, 69.7% are for cars and 30.3% are for SUVs.

BMWFS trust 2015-1 totals $1.2 billion in lease contracts, with an average seasoning of 9 months and an average Fico of 772, and while slightly lower than Mercedes, the average credit score is the strongest of all BMW securitized lease pools, according to Moody’s report.  Of the contracts in this transaction – the company’s ninth publicly registered transaction backed by auto lease receivables since 2000 – 76.1% are for cars, while 23.9% were for SUVs.

The percentage of SUV contracts has been steadily on the rise in BMWFS’s offerings since the 2011-1 trust, when only 13.6% of contracts were for SUV’s.

In its 2015 Outlook, Moody’s predicted that leasing would continue to grow in popularity, and move beyond the luxury market in 2015.

“The credit quality of new lease deals will likely reflect the growing use of leasing to increase loan affordability for customers as car prices rise,” Moody’s wrote in the Outlook. “Leasing activity has traditionally been concentrated around luxury vehicles, but it will continue to expand into mass-market vehicles. Leasing as a percentage of new vehicle sales jumped to nearly 30 percent as of October 2014, up from about 22 percent in 2005.”