BMW Automotive Finance China has set out guidelines for the pricing of its first Chinese auto-loan asset-backed securities (ABS) scheduled for Thursday 12 June.
The renminbi-denominated security is set to be offered to the Chinese inter-bank bond market and will have three tranches.
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With the deal set to close on 17 June, pricing is set to be determined at Thursday’s auction using the China Central Depository & Clearing-operated bidding system.
Yields from the Rmb672m Class A tranche are expected to be between 180bp-280bp over the year-long deposit rate, with a weighted average life (WAL) of 0.55 years, while yields from the Rmb88m Class B tranche are forecast at 500bp-600bp with a WAL of 1.46 years.
A further subordinated tranche of Rmb40m will also be privately placed.
While the Class A tranche is expected to mature on 26 August 2015, the Class B and subordinated ones are both expected to mature later, on January 26 2016; the legal maturity is 26 January 2019.
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By GlobalDataTriple-A ratings have been assigned to the Class A and B tranches by both China Chengxin Rating and China Credit Rating.
The bonds will be issued by Bavarian Sky China 2014-1, and the auto loan portfolio holds a 35.76 month weighted original term, with a remaining term of 18.35 months.
The portfolio’s weighted interest rate is of 9.63%.
BMW’s announcement shortly follows recent announcement made separately by car-makers Toyota and Ford disclosing plans to securitise Chinese car loans.
