Toyota Auto Receivables 2019-B Owner Trust Notes Assigned Ratings

  • Toyota Auto Receivables 2019-B Owner Trust's issuance is an ABS transaction backed by prime fixed-rate auto loan receivables.
  • We assigned our ratings to the class A-1, A-2a, A-2b, A-3, A-4, and B notes.
  • The ratings reflect our view of the transaction's credit support and payment and legal structures, among other factors.
NEW YORK (S&P Global Ratings) May 8, 2019--S&P Global Ratings today assigned 
its ratings to Toyota Auto Receivables 2019-B Owner Trust's asset-backed notes 
(see list).

The note issuance is an asset-backed securities (ABS) transaction backed by 
prime fixed-rate auto loan receivables.

The ratings reflect:
  • The availability of approximately 8.0% and 6.1% credit support (including excess spread) for the class A and B notes, respectively, based on stress cash flow scenarios. These credit support levels provide approximately 13.3x and 10.1x respective coverage of our expected loss range of 0.55%-0.65%. This loss coverage is commensurate with the assigned 'AAA (sf)' and 'AA+ (sf)' ratings on the class A and B notes, respectively.
  • The timely interest and full principal payments made under the stressed cash flow modeling scenarios appropriate for the assigned ratings. In our modeling approach, we used a bifurcated pool method, in which the subvened loans prepay and default at lower rates than the nonsubvened loans. (For cash flow purposes, "subvened" means loans with annual percentage rates of 4% or less.)
  • The loss performance of Toyota Motor Credit Corp.'s previous securitizations, origination static pool performance, and managed portfolio performance; its deal-level collateral characteristics and comparison with its prime auto finance company peers; and our forward-looking view of the economy.
  • Our expectation that under a moderate ('BBB') stress scenario, all else being equal, the ratings on the class A and B notes would not be lowered over its lifetime. This is consistent with our ratings stability criteria, which describe the outer bounds of credit deterioration within one year as one rating category in the case of 'AAA' and 'AA+' rated securities (see "Methodology: Credit Stability Criteria," published May 3, 2010).
  • The transaction's credit enhancement in the form of subordinated notes, a nonamortizing reserve account, overcollateralization that is initially 0% but is expected to build to a target level, a yield supplement overcollateralization amount, and excess spread.
  • Our view of the securitized pool of prime auto loans, which has a weighted average FICO score of 761 and weighted average seasoning of 16 months. The collateral pool includes no loans with original maturity terms greater than 72 months or borrowers with FICO scores below 620.
  • Our view of the transaction's payment and legal structures.
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