S&P Rates Onyx Acceptance Owner Trust 1999-B Notes 'AAA'
24 May 1999
S&P Rates Onyx Acceptance Owner Trust 1999-B Notes 'AAA'
NEW YORK, May 21 -- Standard & Poor's today assigned its
ratings to Onyx Acceptance Owner Trust 1999-B's class A notes and certificates
(see list below).
The 'A-1'-plus rating on the class A-1 notes is based on standard money
market criteria, including prepayment assumptions and liquidity stress. The
triple-'A' rating on the class A-2, A-3, and A-4 notes and certificates is
based on an irrevocable and unconditional bond insurance policy provided by
MBIA Insurance Corp. (MBIA; triple-'A' insurer financial strength rating) that
guarantees timely payment of interest and ultimate payment of principal. MBIA
is insuring all class A notes and the certificates. The underlying
transaction risk assumed by MBIA has been determined to be consistent with an
investment-grade rating based on a sound legal structure and internal credit
support. Credit enhancement consists of a reserve account and annual excess
spread of approximately 7.85%.
The transaction is structured as a sale of assets from Onyx Acceptance
Corp. (the originator and servicer of the contracts) to Onyx Acceptance
Financial Corp., a bankruptcy-remote special purpose corporation, and a
subsequent sale of the assets from Onyx Acceptance Financial Corp. to Onyx
Acceptance Owner Trust 1999-B.
Onyx Acceptance Corp., founded in 1993 by a team of experienced former
banking executives, is a specialized consumer finance company engaged in the
acquisition and servicing of prime retail installment contracts secured by new
and used automobiles and light duty trucks. Onyx, which is headquartered in
Orange County, Calif., went public in March 1996. The company currently has a
relationship with 6,300 dealerships, most of which are franchised new car
dealerships. Onyx originates loans in 16 auto finance centers, five in
California and one each in Arizona, Washington, Nevada, Florida, Illinois,
Georgia, Michigan, New Jersey, North Carolina, Virginia, and Pennsylvania.
Servicing is centralized in the Orange County headquarters. Onyx recently
relocated to a new corporate headquarters in Foothill Ranch, Calif., from its
former location in Irvine, Calif.
As of March 31, 1999, the serviced portfolio totaled $1.54 billion.
Delinquencies have decreased to 2.08% at March 31, 1999, from 2.83% at
Dec. 31, 1998. Management attributed the delinquency level at year-end 1998
to a temporary servicer interruption during the headquarters relocation. At
March 31, 1998, delinquencies were at 1.77%. Annualized net losses as a
percent of average principal are 1.73% for the three months ended March 31,
1999, which is consistent with 1.72% for the year ended Dec. 31, 1998, and
down from 1.77% for the nine months ended Sept. 31, 1998, and 2.03% for the
year ended Dec. 31, 1997.
Onyx's portfolio has recently grown rapidly. Origination volume grew
71% in 1998, compared to 89% in 1997. Accordingly, Standard & Poor's has
calculated and analyzed growth-adjusted net loss numbers to verify the
downward trend in net losses. In addition to portfolio analysis, Standard &
Poor's also reviewed the performance of 15 prior securitizations on a static
pool basis to arrive at a level of expected losses.
The 1999-B receivables pool is composed of approximately $350 million in
retail installment sales contracts. The weighted average APR is approximately
14.69%. The largest state concentration is California (31%), and the weighted
average original maturity and seasoning are 57 months and 1 month,
respectively. Used cars make up nearly 86% of the initial receivables pool.
A reserve account and additional excess spread provide MBIA with a
multiple of expected losses that is consistent with an investment-grade
rating. This is Onyx's sixteenth auto loan asset-backed transaction and fifth
owner trust structure, Standard & Poor's said. -- CreditWire
RATINGS ASSIGNED
Rating
Onyx Acceptance Owner Trust 1999-B
$52 million class A-1 4.93% notes A-1+
$100 million class A-2 5.39% notes AAA
$105 million class A-3 5.78% notes AAA
$72 million class A-4 6.02% notes AAA
$21 million 6.30% certificates AAA