Volkswagen AG is marketing asset-backed securities with a yield premium that’s three times bigger than a similar deal earlier this year, according to a person familiar with the matter.

The German carmaker is offering to pay about 60 basis points to 65 basis points more than benchmark rates for top-ranking notes of the securitization of auto leases, said the person, who isn’t authorized to speak publicly and asked not to be identified. Volkswagen paid a spread of 20 basis points over the one-month euro interbank offered rate for similar debt in April, according to data compiled by Bloomberg.

Debt investors are demanding greater compensation from Volkswagen after the company said its emissions-cheating scandal will cost the firm more than 6.5 billion euros. Volkswagen, a frequent issuer in Europe’s asset-backed securities market, said last week that 2.6 billion euros of loans or leases for vehicles built with engines using cheating software are packaged into its securitizations.

“The pricing is shocking, especially when compared with other deals VW has sold this year,” said Ruben Van Leeuwen, an analyst at Rabobank Nederland in Utrecht. “The emissions scandal and the big uncertainties about what the eventual outcome will be has caused VW to shift from being viewed as the premium brand in auto ABS to being on the budget side of the market.”

The average yield premium investors demand to hold senior tranches of two-year auto ABS is 40 basis points more than benchmark rates, according to data compiled by JPMorgan Chase & Co. The average spread has risen from 32 basis points at the beginning of the year, JPMorgan data show.

Volkswagen’s deal has a weighted-average life of 1.24 years and is expected to price this week, according to the person familiar with the matter.

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