Securitization leveraged to further strengthen credit union through reduced interest rate risk to balance sheet, increased liquidity and net worth
TYSONS, Va., Aug. 29, 2022 /PRNewswire/ -- PenFed Credit Union, the nation's second-largest federal credit union, today announced the closing of their inaugural prime auto loan securitization offering PenFed Auto Receivables Owner Trust 2022-A (PAROT 2022-A). The transaction issued $460,292,000 of fixed-rate, amortizing asset-backed notes backed by prime auto loans.
"PenFed is proud to announce our first auto loan securitization," said PenFed Credit Union President/CEO and PenFed Foundation CEO James Schenck. "Entering the securitization market will reduce interest rate risk, increase liquidity and strengthen net worth."
The securitization is a private placement offering, which in the United States is offered only to qualified institutional buyers under Rule 144A. The asset-backed notes were offered in four senior and three subordinate tranches of notes and rated by S&P and Fitch.
"PenFed is pleased that the auto loan securitization offering was very well received by the market," PenFed Credit Union CFO and EVP, Jill Streit. "We plan to leverage securitization as a tool to further diversify liquidity and funding options, adding additional protections for PenFed members."
PenFed has the second-largest consumer loan portfolio among all credit unions across auto, personal, student, consumer loans and credit cards. PenFed also possesses one of the largest auto loan portfolios among federal credit unions, with originations across all 50 states and Puerto Rico.
J.P. Morgan Securities LLC acted as the structuring lead manager of the transaction and Wells Fargo Securities, LLC, acted as joint lead manager.
About PenFed Credit Union
Established in 1935, Pentagon Federal Credit Union (PenFed) is America's second-largest federal credit union, serving over 2.8 million members worldwide with $36.6 billion in assets as of June 30, 2022. PenFed Credit Union offers market-leading certificates, checking, credit cards, personal loans, mortgages, auto loans, student loans, and a wide range of other financial services. Our mission is to empower members of our community to achieve their financial well-being. PenFed Credit Union is federally insured by the NCUA and is an Equal Housing Lender. To learn more about PenFed Credit Union, visit PenFed.org, like us on Facebook and follow us @PenFed on Twitter. Interested in working for PenFed? Check us out on LinkedIn. We are proud to be an Equal Employment Opportunity Employer.
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SOURCE PenFed Credit Union