PenFed Credit Union Announces First Auto Loan Securitization

Securitization is leveraged to further strengthen the credit union by reducing interest rate risk to the balance sheet, increasing liquidity and net worth

TYSONS, Virginia., August 29, 2022 /PRNewswire/ — PenFed Credit Union, the nation’s second-largest federal credit union, today announced the closing of its first PenFed Auto Receivables Owner Trust 2022-A (PAROT 2022-A) prime auto loan securitization offering. The transaction issued $460,292,000 fixed-rate amortizing asset-backed notes backed by prime auto loans.

“PenFed is proud to announce its first auto loan securitization,” said PenFed Credit Union Chairman and CEO and PenFed Foundation CEO. James Schenck. “Entering the securitization market will reduce interest rate risk, increase liquidity and strengthen net worth.”

Securitization is a private placement offer which, in United States is available only to qualified institutional buyers under Rule 144A. The asset-backed notes were offered in four senior and three subordinated tranches of notes and rated by S&P and Fitch.

“PenFed is delighted that the auto loan securitization offering has been very well received by the market,” said 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 to PenFed members.”

PenFed has the second largest consumer loan portfolio of all credit unions for auto, personal, student, consumer loans and credit cards. PenFed also has one of the largest auto loan portfolios among federal credit unions, with originations in all 50 states and Porto Rico.

JP Morgan Securities LLC acted as lead arranger for the transaction and Wells Fargo Securities, LLC, acted as joint lead arranger.

About PenFed Credit Union
Founded in 1935, the Pentagon Federal Credit Union (PenFed) is the second largest U.S. federal credit union, serving more than 2.8 million members worldwide with $36.6 billion active at June 30, 2022. PenFed Credit Union offers certificates, checks, 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 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? Find us on LinkedIn. We are proud to be an Equal Employment Opportunity Employer.

SOURCE PenFed Credit Union

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