BMW Automotive Finance China has set out guidelines for the pricing of its first Chinese auto-loan asset-backed securities (ABS) scheduled for Thursday 12 June.
The renminbi-denominated security is set to be offered to the Chinese inter-bank bond market and will have three tranches.
With the deal set to close on 17 June, pricing is set to be determined at Thursday’s auction using the China Central Depository & Clearing-operated bidding system.
Yields from the Rmb672m Class A tranche are expected to be between 180bp-280bp over the year-long deposit rate, with a weighted average life (WAL) of 0.55 years, while yields from the Rmb88m Class B tranche are forecast at 500bp-600bp with a WAL of 1.46 years.
A further subordinated tranche of Rmb40m will also be privately placed.
While the Class A tranche is expected to mature on 26 August 2015, the Class B and subordinated ones are both expected to mature later, on January 26 2016; the legal maturity is 26 January 2019.
Triple-A ratings have been assigned to the Class A and B tranches by both China Chengxin Rating and China Credit Rating.
The bonds will be issued by Bavarian Sky China 2014-1, and the auto loan portfolio holds a 35.76 month weighted original term, with a remaining term of 18.35 months.
The portfolio’s weighted interest rate is of 9.63%.
BMW’s announcement shortly follows recent announcement made separately by car-makers Toyota and Ford disclosing plans to securitise Chinese car loans.