Irish motor finance firm First Citizen Finance has raised over €176m through a securitisation of loans linked to the company’s auto finance business.
The latest funding marks the third securitisation deal between First Citizen and Deutsche Bank and features joint lead managers of both Citi and Deutsche Bank. The fund will provide the company with additional finance to support the Irish motor industry in 2021.
First Citizen was established in 2012 by Chris Hanlon who led an MBO of Permanent TSB’s car finance business, Permanent TSB Finance. The latest securitisation deal features a 12 month replenishment period, bringing the total loans financed to an expected €225m over the life of the transaction.
The coupon on the senior notes, rated AAA by S&P and Moody’s is marginally higher than price guidance. In addition to car finance, First Citizen provides finance for the Agri and SME sectors and for Commercial Real Estate.
Chris Hanlon, founder and managing director of First Citizen, said that the securitisation had been well supported by institutional investors: “The Investors, most of whom had invested in prior placements identified the strong management engagement through the Pandemic. It also attracted interest from larger investors. This is good news for the Irish motor industry and the strong response testifies to the confidence in the underlying strength of that market.
“There are over 2.2m passenger cars on the road and they will need replacement over time. The replenishment period means that we can tap into additional funds through next year without having to organise a full new securitisation.”
First Citizen spoke to Motor Finance earlier this year to discuss the Irish motor finance sector and the challenges it has faced this year.
“The Covid-19 pandemic had an immediate and profound impact on the Irish car finance sector from March to mid-June,” Hanlon said. “During that time, origination levels were very low. Our own focus turned to the management of the live book and we made early special arrangements to assist any customers impacted by the unfolding and unprecedented situation.”