Westcorp Announces $1 Billion Automobile Receivable Asset-Backed Securities Offering

Strategic Insights -

Westcorp, the financial services holding company, announced the pricing of a $1 billion offering of automobile receivable asset-backed securities on Wednesday. The offering was lead managed by Banc of America Securities LLC and is expected to close on May 31, 2000. This is Westcorp's third consecutive securitization of $1 billion or more, with a total of $16.6 billion in automobile receivable asset-backed securities issued in 48 transactions.

Key Takeaways:

  • The $1 billion offering is a secured financing, rather than a sale, due to the underlying structure of the securitization.
  • Westcorp's subsidiary, WFS Financial Inc., has issued a total of $16.6 billion of automobile receivable asset-backed securities in 48 transactions.
  • The offering is divided into two classes, Class A Notes and Class B Notes, with the Class B Notes being purchased by an affiliate of WFS.
  • All payments with respect to the Class B Notes are subordinate to payments on the Class A Notes.
  • The Class A-1 Notes will be rated A-1+ by Standard & Poor's and P-1 by Moody's, while the Class A-2, A-3 and A-4 Notes will be rated AAA by Standard & Poor's and Aaa by Moody's.
  • Timely principal and interest payments on the Class A Notes are guaranteed by an insurance policy provided by Financial Security Assurance Inc.
  • Westcorp is a financial services holding company with principal subsidiaries WFS Financial Inc. and Western Financial Bank.
  • WFS Financial Inc. is one of the nation's largest independent automobile finance companies, with a total of $5.7 billion in automobile contracts serviced.

Statistics:

  • $1 billion: the size of the automobile receivable asset-backed securities offering.
  • 48 transactions: the number of automobile receivable asset-backed securities transactions issued by Westcorp's subsidiary, WFS Financial Inc.
  • $16.6 billion: the total amount of automobile receivable asset-backed securities issued by Westcorp's subsidiary, WFS Financial Inc.
  • $5.7 billion: the total amount of automobile contracts serviced by WFS Financial Inc.
  • 25 retail bank branches: the number of retail bank branches operated by Western Financial Bank in California.

Sources:

  • Business Wire, "Westcorp Announces Pricing of $1 Billion Automotive Receivable Asset-Backed Securities" (May 24, 2000)
  • Westcorp Inc., "Corporate Overview" (no date)
  • WFS Financial Inc., "About Us" (no date)