WFS Financial Announces its Fourth Senior/Subordinated Securitization Transaction
WFS Financial Inc. announced Nov. 5 the pricing of a $1.4 billion offering of automobile receivable asset-backed securities. The offering was lead managed by Deutsche Bank Securities and co-managed by Banc of America Securities LLC, Citigroup, Credit Suisse First Boston, and Merrill Lynch & Co.
This offering is expected to close on Nov. 25, 2003.
The weighted average cost of funds is estimated to be 2.7 percent or approximately 33 basis points over the swap curve. The initial credit enhancement in the transaction will be 2.5 percent, consisting of 1.0 percent cash and 1.5 percent over-collateralization. The target over-collateralization enhancement level is 6.5 percent, which the company expects should take about 8 months to satisfy.
"This transaction employs a combination of subordinated notes and a spread account to support the ratings," said Lee Whatcott, chief financial officer of WFS Financial. "We have now used a senior-subordinated structure in four of our past six securitization transactions. The market continues to receive these transactions favorably, providing us another financing alternative beyond our surety-wrapped securitization transactions."
About WFS Financial
WFS Financial and its affiliates issue automobile asset-backed securities in the United States.
The company and its affiliates have issued a total of $33.2 billion of such securities in 60 transactions to date.
WFS Financial is an independent automobile finance company specializing in originating, securitizing, and servicing new and pre-owned prime and nonprime credit quality automobile contracts through its nationwide relationships with automobile dealers.
Information about WFS Financial can be found at www.wfsfinancial.com.
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