MT. LAUREL, NJ – PHH Corporation announced today the successful closing of $1.0 billion of funding through Chesapeake Funding LLC. The asset-backed notes were rated AAA/Aaa by Standard & Poors Rating services and Moody's Inventory Services respectively.
According to PHH, the notes qualified as "eligible collateral" under the Term Asset-Based Securities Loan Facility (TALF) program, which enables certain qualified investors to fund a substantial portion of their investment in TALF-eligible securities with loans from the Federal Reserve Bank of New York.
The net proceeds from the issuance and sale of the notes will be used to repay a portion of Chesapeake's Series 2006-1 Floating Rate Asset Backed Variable Funding Investor Notes, with the remaining proceeds expected to be used to fund the acquisition of vehicles to be leased to customers of PHH Vehicle Management Services, LLC, (PHH Arval), the company's fleet management business.
George J. Kilroy, PHH Arval president and CEO, told Automotive Fleet: "PHH is committed to providing a lease product to our fleet management clients that is consistent with our outstanding client service and award winning technology and innovation. Our ability to close the first TALF eligible securities issuance backed by commercial fleet lease assets in the market demonstrates PHH Arval's commitment to being a leading provider of financing solutions in the commercial fleet industry."
In addition to this successful offering, other portions of the company's funding strategy are still moving forward, including consideration of the purchase of a chartered depository institution as an important strategic focus for both fleet and mortgage, according to a company spokesperson.
PHH Arval also said this funding news, "combined with PHH's ongoing commitment to customer service, investment in technology, innovative new product offerings, and prestigious marketplace awards, provides positive momentum for PHH and its clients going into the second half of the year."