Wisr boosts funding capacity via $200m ABS deal

The first asset-backed securities (“ABS”) deal for the secured vehicle loan product “reduces the cost of funds and increases funding capacity”, Wisr has explained.

This is its third ABS transaction, known as the $200 million Wisr Independence Trust 2023-1.

The transaction is due for settlement in the week commencing 20 February 2023.

Highlights of the security include a $200 million priced ABS supported by “a pool of fully amortising secured vehicle loans”, with a weighted average margin of 2.58 per cent over one-month BBSW achieved.

Its prime quality loan book achieved AAA Moody’s rating for the top tranche ($120 million) while the Wisr Independence Trust 2023-1 frees up $200 million of capacity in the Wisr Secured Vehicle Warehouse (“WH2”), the lender confirmed.

Overall, it means $675 million has been raised to date through term deals, it added.

In terms of its structure and makeup, the transaction comprises seven tranches, with the senior tranche (Class A) being AAA-rated, no less. Wisr confirmed that National Australia Bank (NAB) acted as the arranger, dealer, and joint lead manager, while Westpac Banking Corporation (Westpac) was the dealer and joint lead manager.

According to the company, the transaction will “deliver a reduction in Wisr’s financing costs” and “increase funding capacity for the business” to support further growth of the $916 million loan book (as at 31 December 2022).

Ultimately, has brought Wisr’s total ABS transactions raised by the company to $675M, it highlighted.

It confirmed that the company’s previous two ABS transactions - the Wisr Freedom Trust 2021-1 and the Wisr Freedom Trust 2022-1 - were also arranged by NAB and achieved AAA Moody’s rating for the top tranches.

Further diversifying funding structures

Wisr chief financial officer Mr Andrew Goodwin commented: “Given the current macroeconomic environment, we’ve prudently moderated our growth to navigate these uncertain economic conditions and protected our margins by lifting yield.”

“The successful completion of Wisr’s third ABS transaction – our first secured vehicle loan product – will further diversify our funding structures, free up $200M of capacity in our current warehouse and reduce the cost of funds.

“We’re very pleased with investor support for the transaction, which demonstrates their confidence in the Wisr business, the quality of our prime loan book and the high-quality assets Wisr has originated,” he explained.

He continued: “This third ABS transaction follows the $25M corporate debt facility secured towards the end of Q2FY23 to strengthen the Company’s balance sheet, as well as credit approval from another Big Four bank for a third warehouse facility.”

“These milestones are a testament to the continuing strength of the Company’s prime loan book and represent third-party validation of the forward-looking performance of the loan book and our operational controls.

“We have the resources and capability to safeguard the business and be a profitable, well-capitalised company of significant scale,” Mr Goodwin concluded.

Meeting milestones and ratings

As Wisr explained, the levels of credit support required by Moody’s at each rating level and the pricing across the note classes “reflect the

strong credit performance of the underlying prime-secured vehicle loans”.

It added that the company has also met the required milestones for the drawdown of an additional $5M available under the $25M corporate debt facility, with $20M drawn to date.

[Related: Wisr hails ‘first profitable quarter’]