Texas does not comply with federal air quality standards. To scale the reach of the On the Road Lending initiative, which provides a way for working families to purchase environmentally beneficial vehicles, Champion is preparing a green bond issuance for the market. We expect that this offering will be a tax-exempt bond, issued in a public-private partnership with a Texas municipality, county or state agency. The bond would be an auto loan asset-backed security, ring-fenced for an environmentally beneficial project.
Toyota Financial Services completed two large auto loan-ABS green bonds to provide capital for loans on hybrids. These were corporate taxable bonds. Champion’s green bonds would be similar, covering both highly fuel-efficient gas engines and hybrids. We expect our green bonds to be tax exempt and smaller in size.