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Matheson Advises on Irish Auto Loan Securitisation

Matheson advised Deutsche Bank AG as Arranger and Joint Lead Manager and Citigroup Global Markets Limited as Joint Lead Manager, in relation to the €176 million asset backed securities issued by Citizen Irish Auto Receivables Trust 2020 DAC in November 2020.  The transaction represents the third public securitisation by First Citizen Finance DAC and the largest of its securitisations to date.  The transaction is a 13 month revolving cash securitisation of car loans (hire purchase contracts and leases) extended to Irish borrowers by First Citizen Finance DAC.  The Class A Notes were rated AAA / Aaa by S&P and Moody’s respectively.

A notable feature of the transaction is that the revolving period is structured so as to enable Citizen Irish Auto Receivables Trust 2020 DAC to replenish its portfolio of car loans on a daily basis for an initial 13 month period.  First Citizen Finance DAC has stated that: “the replenishment period means that we can tap into additional funds through 2021 without having to organise a full new securitisation”.  S&P have noted that this feature is “unique among the ABS and RMBS transactions that S&P rate in Europe.

The transaction is the first Irish law auto loan securitisation since the outbreak of the COVID-19 pandemic.  The ratings assigned to the Class A Notes and the investor demand for the transaction are a reflection of the confidence of the international capital markets in Irish assets.

The transaction was fully documented under Irish law and the securities were listed on the regulated market of Euronext Dublin.

The portfolio consisted of over 13,000 contracts originated predominantly since 2018.  First Citizen Finance DAC will act as servicer of the portfolio.

The Matheson team providing sole legal and tax advice to Deutsche Bank and Citi on the transaction was led by Finance and Capital Markets Partner, Turlough Galvin, and David Kiernan.  Matheson also acted as listing agent.