KBRA UK (KBRA) has issued preliminary credit ratings for two classes of notes from Driver UK Multi-Compartment S.A., representing the Driver UK Nine (Driver UK 9) securitisation deal. This transaction, involving auto loan receivables, is a significant addition to the securitisation platform managed by Volkswagen Financial Services AG’s (VWFS) UK subsidiary, Volkswagen Financial Services (UK) Limited (VWFS (UK)).
The Driver UK 9 transaction will feature Class A and Class B notes along with a subordinated loan facility. These securities are backed by a revolving pool of Personal Contract Purchases (PCPs), Hire Purchase Contracts (HPs), and Lease Purchase Agreements (LPs). PCPs allow customers to either make a final balloon payment to own the vehicle or return it to VWFS (UK). HPs are fully amortising contracts with no balloon payment, while LPs involve fixed instalments with a balloon payment at the end. All contracts are extended to both consumer and commercial customers in the UK.
This marks the latest public securitisation from VWFS (UK) under its Driver platform, which has been active since 1996 and specifically targeting UK receivables since 2002. The transaction includes credit enhancement measures such as overcollateralisation, subordination, a cash reserve account, and excess spread to mitigate risk.
The securitisation includes a revolving period that will conclude on the payment date falling in April 2025, unless an early amortisation event occurs. This structure aims to maintain a robust credit profile and provide investors with a stable return.
The full rating report and relevant documents can be accessed through the KBRA website, providing detailed insights into the credit considerations, sensitivity analyses, and ESG factors influencing the ratings. The rating methodologies employed include KBRA’s Auto Loan ABS Global Rating Methodology, General Global Rating Methodology for Asset Backed Securities, Global Structured Finance Counterparty Methodology, and ESG Global Rating Methodology.
Further details on the credit rating’s endorsement status for use in the European Union, as well as KBRA’s policies and methodologies, are available on the KBRA website. For more information on the meaning of each rating category and the associated disclosures, visit the rating page at KBRA.com.
KBRA‘s rating action underscores the continuing confidence in VWFS (UK) and the resilience of its auto loan receivables portfolio, reinforcing the strength of the UK auto loan market.