#United States #Tysons #Securitization #PenFed Credit Union #Auto Loans

PenFed Credit Union Achieves Significant Milestone with Latest Auto Loan Securitization

PenFed Credit Union, a prominent player among federal credit unions in the U.S., has successfully completed its third auto loan securitization, signifying a vital step in the enhancement of its operational framework. This recent transaction, officially titled PenFed Auto Receivables Owner Trust 2025-A (PNFED 2025-A), involves $398,490,000 in fixed-rate, amortizing asset-backed notes designed specifically for prime auto loans.

According to the organization's President and CEO, James Schenck, this third securitization is a pivotal strategy aimed at diversifying PenFed's funding sources while simultaneously boosting liquidity and net worth. This innovative approach is particularly timely, given the competitive nature of the financial market.

The current securitization acts as a private placement offering, which, under U.S. regulations, is exclusively available to qualified institutional buyers as per Rule 144A. In this round, the asset-backed notes were structured in various tranches, comprising four senior tranches and three subordinate ones, which were subsequently rated by reputable institutions SP and Fitch.

CFO and EVP, Sarah Heintzman, expressed satisfaction regarding the market's positive reception of this auto loan securitization, stating that it enhances PenFed’s position as an established programmatic issuer. The strategic advantage here lies in utilizing securitization to offer added value to its members through a diversified array of liquidity and funding options.

Notably, PenFed holds the distinction of having the second-largest consumer loan portfolio among all credit unions, which includes segments such as auto, personal, and student loans, as well as credit cards. Furthermore, PenFed boasts one of the most substantial auto loan portfolios within the federal credit union landscape, with loan originations spread across all 50 states and Puerto Rico.

The PNFED 2025-A transaction is especially notable as it marks the second instance where auto loans from Puerto Rico are included as part of the collateral pool. This reflects PenFed's commitment to a wide-reaching operational approach in serving its diverse membership.

Leading the structuring of this transaction was J.P. Morgan Securities LLC, while Wells Fargo Securities LLC acted as the joint lead, alongside Goldman Sachs Co LLC serving as co-manager. This collaboration among significant financial institutions ensures that the securitization process is efficient and compliant with regulatory requirements.

About PenFed Credit Union

Established in 1935, the Pentagon Federal Credit Union (often referred to as PenFed) stands as one of the most significant federal credit unions in the United States. Serving close to three million members globally, PenFed has amassed assets totaling around $30 billion. The institution prides itself on offering a wide assortment of financial services, including market-leading certificates, checking accounts, credit cards, personal loans, mortgages, auto loans, and student loans, always prioritizing the interests of its members. Furthermore, PenFed is federally insured by the NCUA and practices equal housing lending, reinforcing its commitment to responsible financial operations.

For additional information about PenFed Credit Union, please visit PenFed.org or follow them on social media platforms like Facebook and X (formerly Twitter). Interested individuals looking to join the PenFed team can explore opportunities through their LinkedIn page. The organization also prides itself on being an Equal Employment Opportunity Employer.