Westlake Announces Auto Securitization
LOS ANGELES, California – June 25, 2010 – Westlake Financial Services is planning a USD 120m subprime auto loan ABS for next week, said CFO Paul Kerwin. The Rule 144A series 2010-1 offering is being led by Hexagon Securities, itself a first-time term ABS underwriter.
Officials at Hexagon declined to comment.
Westlake, a privately owned and unrated issuer, has been originating subprime auto loans since 1988, Kerwin said. Westlake has issued a private securitization in the past – purchased by FSA – and currently sells loans into a commercial paper conduit. Westlake maintains a USD 100m revolving conduit facility with Wells Fargo Preferred capital and a USD 260m unsecured credit facility with a group of banks, also led by Wells Fargo. Westlake Automobile Receivables Trust 2010-1 achieved triple-A ratings on its USD 100m senior A class by DBRS, Inc. and Standard & Poor’s, with 41% credit enhancement, according to the offering’s presale report.
The company plans to become a programmatic issuer going forward, with at least one-to-three term securitizations per year within five years. Westlake chose Hexagon, a New York-based boutique, which has never underwritten a term ABS, because its belief that Hexagon would be more focused on its transaction than other banks, Kerwin said. Kerwin cited Hexagon’s ability to successfully structure the offering to a natural triple-A rating from two rating agencies.