VW takes new Belgian auto ABS vehicle for a spin

Volkswagen D’Ieteren, a Belgian car finance subsidiary of Volkswagen Financial Services, has issued the first bonds from its newly-established master securitisation vehicle, Driver Belgium Master.

The €527.24m debut issuance, Driver Belgium Compartment 1, is a one-year revolving auto loan securitisation comprising Triple A rated Class A notes, Double A rated Class B notes and an unrated subordinated loan, according to rating reports from Moody’s and Fitch. The programme allows for the issuance of up to €1bn.

The €481m Class A tranche was priced at 65bp over one-month Euribor and the €21.25bn Class Bs at 145bp. All the notes were sold at par.

Kais Khader, who works in the treasury department at VWFS, told IFR that the notes were placed with investors but not marketed publicly. ING Bank was the lead manager.

"ABS is one of the strategic funding sources for VWFS," said Khader. "As part of the refinancing strategy we are implementing ABS to all entities where we have reached the required portfolio size."

As with VWFS's other master transactions, each class is split into a separate series for each investor. The Class A notes of Driver Belgium Compartment 1 were split into five series and the Class Bs into two.

The transaction is backed by €530m of auto loans taken out by consumers to buy mostly (90.8%) new cars. About a two thirds of the loans have balloon repayments and the remaining third are a standard amortising loan product. VW cars make up 57% of the collateral.

The low proportion of used cars in the pool reflects the Belgian car market more generally, according to a rating report from Fitch.

Volkswagen D’Ieteren is a joint venture between VWFS and D’Ieteren Group, a family-run car distribution and windscreen repair company based in Brussels.

Driver Belgium Compartment 1

Updated story: Adds quote, pricing details, number of investors