World Omni Auto Lease $1.1 Billion Notes Expected 'AAA' By Fitch - Fitch Financial Wire -
14 November 1997
World Omni Auto Lease $1.1 Billion Notes Expected 'AAA' By Fitch - Fitch Financial Wire -
NEW YORK, Nov. 14 -- World Omni 1997-B Automobile Lease
Securitization Trust's $260,000,000 6.07% class A-1, $220,000,000 6.08% class
A-2, $390,000,000 6.18% class A-3 and $239,128,000 6.20% class A-4 automobile
lease asset-backed notes are expected to be rated 'AAA' by Fitch. In
addition, the $62,950,000 class B notes are expected to be rated 'A'. No
principal will be payable on the securities until the termination of the
revolving period, which will be the earlier of either the December 1998
distribution date or the occurrence of an early amortization event. Principal
and interest will be distributed on the twenty-fifth of each month, interest
commencing on Nov. 25, 1997, with principal payments commencing following the
termination of the revolving period.
The expected ratings are based on the quality of the trust assets,
available credit enhancement, residual value insurance policy provided by
American International Specialty Lines Insurance Co. (AISLIC), World Omni
Financial Corp.'s (WOFCO) strong underwriting and servicing capabilities, cash
flows and the integrity of the legal structure. Credit enhancement on the
aggregate $1.109 billion class A notes reflects the aggregate 7.5%
subordination, provided by the 5.25% class B notes and the 2.25% transferor
interest, 1% reserve fund, excess spread and residual value insurance policy.
The expected rating on the class B notes reflects the 2.25% subordination of
the transferor interest, 1% reserve fund, excess spread and residual value
insurance policy.
The trust assets will consist primarily of an undivided 99.8% interest in
the special unit of beneficial interest (SUBI), which will evidence the
beneficial interest in a pool of retail closed-end automobile lease contracts
originated by dealers located throughout the U.S. The remaining 0.2% of the
SUBI will be retained by World Omni Lease Securitization, L.P., a wholly owned
special purpose subsidiary of WOFCO, and will rank pari passu with respect to
all payments, losses and liabilities of the SUBI assets. The contracts will
be finance leases for accounting purposes, written for the capitalized cost of
each vehicle plus an implied lease rate. The contracts provide for equal
monthly payments such that each contract will be amortized to the residual
value established at the lease's origination.
The reserve fund will be funded at closing with 1.0% of 99.8% of the
aggregate net investment value, or the discounted balance of all contracts
excepting charged-off, liquidated, matured and certain other contracts, plus
the aggregate residual values of all outstanding contracts. The transferor
interest will equal 2.25% of the trust and as the equity interest in the
trust, will be subordinated to all other required payments on each
distribution date. The residual value insurance policy provided by AISLIC, an
indirect subsidiary of American International Group, Inc. (AIG), will provide
coverage for the insured residual value loss amount for any collection period.
The initial contracts in the SUBI consist of 49,166 lease contracts, with
a weighted average lease rate of approximately 8.80%. The aggregate net
investment value of the initial contracts is approximately $1,201,460,915,
with an aggregate residual value of $833,211,953. The original weighted
average maturity is 40.96 months, with a remaining weighted average maturity
of 34.47 months. Significant geographic concentrations exist in Florida
(32.46%), North Carolina (17.91%) and Georgia (13.97%). Subsequent contracts
will be selected based on the same criteria used in the selection of the
initial contracts.
WOFCO is a Florida corporation that is a wholly owned subsidiary of JM
Family Enterprises, Inc. (JMFE). JMFE also wholly owns Southeast Toyota
Distributors, Inc., which is the exclusive distributor of Toyota automobiles
and light duty trucks in Florida, Alabama, Georgia, North Carolina and South
Carolina. WOFCO provides consumer lease and installment contract financing to
retail customers of, and floorplan and dealer financing to, dealers located
throughout the U.S. As of Dec. 31, 1996, aggregate net outstanding retail
lease contracts serviced by WOFCO were $4.6 billion, with estimated aggregate
residual values as of the end of their lease terms of $3.3 billion. WOFCO's
consolidated gross revenues for the year ending Dec. 31, 1996 were
approximately $275 million.
SOURCE Fitch Investors Service