NEW YORK--(EON: Enhanced Online News)--Kroll Bond Rating Agency (“KBRA”) announces the preliminary ratings to five classes of CarFinance Capital Auto Trust 2013-2 (“CFCAT 2013-2”), a subprime auto asset-backed securities transaction.
CFCAT 2013-2 is initially collateralized by approximately $310.0 million of subprime auto loan receivables. The preliminary ratings reflect the initial credit enhancement levels ranging from 37.00% for the Class A notes to 4.00% for the Class E notes, which build to 42.00% and 9.00% for the Class A and Class E notes, respectively. The target enhancement levels will increase to 47.00% for the Class A notes down to 14.00% for the Class E notes if there is a breach of the cumulative net loss trigger in the transaction.
CarFinance Capital (“CarFinance”) is a specialty auto finance company headquartered in Irvine, CA that was established in March 2011 and is indirectly owned by affiliated funds of Perella Weinberg Partners’ Asset Based Value Strategy and CarFinance’s senior management. CarFinance’s management team is headed by Jim Landy, who was the co-founder and CEO of Triad Financial and most recently, the CEO of Fireside Bank, a former subsidiary of Unitrin. CarFinance focuses its origination strategy through two primary channels: (1) the indirect channel, through primarily franchise auto dealers that are established and maintained by local sales representatives, and (2) the direct channel, which is directly to consumers through its website, and bank and online partnerships.
KBRA applied its U.S. Auto Loan ABS methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and CarFinance’s historical static pool data. KBRA also conducted an operational assessment of CarFinance, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.
Preliminary Ratings Assigned: CarFinance Capital Auto Trust 2013-2
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All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report: https://www.krollbondratings.com/show_report/805.
U.S. Auto Loan ABS Rating Methodology
About Kroll Bond Rating Agency
KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (“NRSRO”). In addition, KBRA is recognized by the National Association of Insurance Commissioners (“NAIC”) as a Credit Rating Provider (“CRP”).