Silver Arrow S.A. Compartment UK 2020-1: 11 April 2020
A standalone issue, which will be the third securitisation of UK assets from Mercedes-Benz Financial Services.
The Issuer will make payments on the notes from payments of principal and interest it receives from borrowers pursuant to automotive hire purchase agreements and personal contract plan agreements originated by Mercedes-Benz Financial Services UK Limited, which will be purchased by the issuer on the purchase date (being identical with the issue date). These hire purchase agreements and personal contract plan agreements provide for equal monthly payments over the term of the contract or monthly payments and a final bullet payment or, in respect of the personal contract plan agreements, an additional larger optional "balloon" Optional Final Payment at the end of the term.
Eligibility criteria (includes): such Receivable has been originated by the Seller pursuant to a Financing Contract in the ordinary course of the Seller's business in compliance with the Credit and Collection Policy; the obligor is not insolvent; pays its monthly instalments through Direct Debit; if it is a corporate entity has its registered office in England, Scotland, Wales or Northern Ireland or, if it is an individual has its place of residence in England, Scotland, Wales or Northern Ireland; has made at least one scheduled monthly payment; is denominated and payable in Sterling; is governed by the laws of England and Wales; MBFS holds legal title to the related vehicle.
The portfolio consists of 35,933 agreements, where the average current outstanding balance is £18,874 and the largest is £172,697. Product type (by agreement/current balances): New Contract Purchase 18,661 / 63.66%; Used Contract Purchase 10,546 / 26.27%, Used Hire Purchase 4,393 / 6.10% and New Hire Purchase 2,333 / 3.97%. Vehicle status: New Passenger Car 19,338 / 63.76%, Used Passenger Car 14,245 / 31.25%, New Commercial Vehicle 1,656 / 3.87% and Used Commercial Vehicle 694 / 1.12%. Customer type: Private Individual 32,759 / 92.07%, Company 2,603 / 6.49%, Sole trader 445 / 1.11%, Partnership 126 / 0.34%. The WA seasoning is 16.13 months. Regional distribution: London 19.51%, South East England 13.45%, North West England 13.16% and the East of England 11.13%.
Significant Investor: It is expected that on the Issue Date: (a) MBFS will acquire from the Issuer a material net economic interest of at least 5% in the securitisation through the holding of the Class B Notes and the Subordinated Loan in compliance with its risk retention requirements as described above; and (b) a single investor will acquire 100% of the Class A Notes.
EU Risk Retention: MBFS will, as originator for the purposes of the Securitisation Regulation, retain for the life of the transaction a material net economic interest of at least 5% in the securitisation, as required by Article 6 of the Securitisation Regulation. As of the Issue Date such interest will, in accordance with Article 6(3)(d) of the Securitisation Regulation, be retained through the holding of the Class B Notes and the Subordinated Loan.
U.S. Risk Retention Rules: The issuance of the Notes has not been designed to comply with the U.S. Risk Retention Rules other than the exemption under Section _.20 of the U.S. Risk Retention Rules and no other steps have been taken by the Issuer, the Seller, the Arranger, the Lead Manager, or any of their respective affiliates or any other party to accomplish such compliance.
STS: The transaction is intended to qualify as an STS securitisation within the meaning of Article 18 of the Regulation (EU) 2017/2402. The Originator will notify the European Securities and Markets Associations in accordance with Article 27 of the Securitisation Regulation, and the FCA, that the requirements of Articles 19 to 22 of the Securitisation Regulation have been satisfied with respect to the Notes.
Compare/contrast: Silver Arrow S.A. Compartment UK 2018-1, E-Carat plc - Series 11, Dowson 2020-1 plc