Yes Car is 25 per cent owned by management and 75 per cent by Candover, the private equity company.
The transaction is distinctive on several counts. For one, it is the first time that sub-prime auto loans have been used in a securitisation in the European market.
A second unusual feature is that a young company such as Yes Car, which started operations only four years ago, is undertaking an ABS transaction. This has been possible because a successful ABS issue must be based on securitised assets with stable track records and predictable revenue flows. The fact that Yes Car was able to satisfy this requirement for the sub-prime auto loan category made it an ideal opportunity for the company to restructure its financing.
The company was able to achieve this in part because of outstanding A1 and A+ ratings from Moody’s and S&P.
This issue may be the first of many. “A finance company is a hungry beast and needs access to the capital markets. We hope that the facility will remain open for us to tap again, perhaps later this year,” said Joe Prince, joint managing director at Yes Car.
A Special Purpose Vehicle (SPV) called Spartacus was established for the deal.
The deal was lead managed by Royal Bank of Scotland.