World Omni Auto Lease Trust $1.6B Notes Rated AAA By Fitch IBCA
23 November 1998
World Omni Auto Lease Trust $1.6B Notes Rated AAA By Fitch IBCA - Fitch IBCA -
NEW YORK, Nov. 23 -- World Omni 1998-A Automobile Lease
Securitization Trust's $430,000,000 floating rate class A-1, $440,000,000;
floating rate class A-2; $410,000,000 floating rate class A-3; and
$351,383,000 floating rate class A-4 automobile lease asset-backed notes are
rated `AAA' by Fitch IBCA. The $92,592,000 floating rate class B automobile
lease asset-backed notes were not publicly offered. No principal is payable on
the securities until the end of the revolving period, which will be the
earlier of Dec. 1, 1999 or the occurrence of an early amortization event.
Principal and interest is distributed on the 15th of each month; interest
commencing on Dec. 15, 1998 with principal payments following the termination
of the revolving period.
The securities are backed by retail closed-end automobile and light truck
lease contracts. The class A ratings are based on the quality of the trust
assets, available credit enhancement, residual value insurance policy provided
by Federal Insurance Co. (FIC), the terms of the interest rate swap and the
financial strength of the swap counterparty (Merrill Lynch Derivative Products
AG). The ratings also reflect World Omni Financial Corp.'s (WOFCO) strong
underwriting and servicing capabilities, and the integrity of the cash flow
and legal structures. Credit enhancement on the aggregate $1.631 billion class
A notes totals 8.5% and consists of the 5.25% class B notes, the 2.25%
transferor interest, and the 1% reserve fund. Excess spread is also available
for credit support.
The reserve fund was funded at closing with a cash deposit of 1% 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 equals 2.25% of the trust, and as the equity interest in the trust,
is subordinated to all other required payments on each distribution date. The
residual value insurance policy provided by FIC, a wholly owned subsidiary of
The Chubb Corp., is available to cover the insured residual value loss amount,
up to $60,000, for matured contracts in any collection period.
Fitch IBCA performs various scenarios that stress collateral pool
performance variables, including delinquency interest, prepayment speeds,
recovery rates, loss speed vectors, and a base case loss estimate to determine
credit enhancement levels for the notes. With the current levels of
enhancement, the trust can withstand a loss multiple of 5 times Fitch IBCA's
base case expectation.
The initial contracts consist of 74,744 lease contracts with a weighted
average lease rate of approximately 8.65%. The aggregate net investment value
of the initial contracts is approximately $1,763,657,871. The original
weighted average maturity is 41.15 months, with a remaining weighted average
maturity of 32.86 months. Significant geographic concentrations exist in
Florida (32.14%), North Carolina (14.55%) and Georgia (11.71%). Subsequent
contracts will be selected based on the same criteria used in the selection of
the initial contracts.
World Omni Financial Corp. 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.