OCCU Announces Second Auto-Loan Securitization Sale

October 24, 2023

From left: OCCU President and CEO Ron Neumann and OCCU Executive Vice President Greg Schumacher.

OCCU (Oregon Community Credit Union), based in Eugene, Oregon, has issued its second auto asset-backed securities sale this month, the first credit union to do so within one year of its first.

The transaction offers $258 million of fixed-rate notes and follows a $275 million offering in October 2022. A majority are senior notes that carry A-1+, P-1, AAA, and Aaa S&P and Moody’s ratings.

OCCU is an experienced originator and servicer with strong historical performance, high credit enhancement, and attractive risk-adjusted returns. “Continuing to access the capital markets through the issuance of asset-backed securities augments the credit union’s balance sheet for origination capacity and enables us to more fully capitalize on our successful and scalable vehicle lending platform,” said OCCU Executive Vice President Greg Schumacher. “OCCU anticipates executing one to two securitizations each year, subject to loan demand, competition, and pricing.”

Securitization — the process of bundling hundreds or thousands of individual loans into a marketable security — has been widely used by traditional lenders for decades and fintechs in recent years. In 2017, the National Credit Union Administration allowed credit unions to look to the securitization market to liquefy portions of their loan portfolios. OCCU is one of only a handful of credit unions to do so. OCCU’s current offering includes direct and indirect prime-quality vehicle retail installment sales contracts secured by new and used automobiles, light-duty trucks, sport utility vehicles, and vans.

As a regional auto-lending leader in the Pacific Northwest with a managed auto portfolio of $3.1 billion, OCCU is one of the largest credit union indirect lenders in the U.S. OCCU has been making vehicle loans for nearly 70 years. It has built a strong program by delivering high-touch, value-added service to both its member borrowers and dealer partners; continuously investing in technology and business development resources; and applying rigorous and disciplined underwriting and loss mitigation practices.

“With the successful close of our second transaction in less than 12 months, I am pleased that OCCU continues as an active participant in the capital and structured finance markets,” said Ron Neumann, OCCU president and CEO. “As OCCU increases our already prominent footprint in the indirect lending and – now – in the capital market spaces, we are well-positioned to leverage these competencies in pursuit of our overall credit union objectives, designed to optimize our investments back into the OCCU membership and fulfill our vision to enrich lives.”

OCCU also has decades of experience providing diversified personal and business banking products and services, including savings, checking, credit cards, mortgages, insurance, investments and auto loans. As of Aug. 31, 2023, OCCU had total assets of $3.525 billion and capitalization of $325 million.

Posted in Oregon, Regional Member News.