Kroll Bond Rating Agency Assigns Preliminary Ratings to First Investors Auto Owner Trust 2013-1

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) announces the preliminary ratings on four classes of First Investors Auto Owner Trust 2013-1 (FIAOT 2013-1), an auto loan ABS transaction.

The First Investors Auto Owner Trust 2013-1 are newly issued, asset-backed securities (ABS) collateralized by $187.0 million of subprime auto loan receivables. The preliminary ratings reflect the initial credit enhancement levels of 19.90% for the Class A notes, 14.55% for the Class B notes, 6.53% for the Class C notes and 1.50% for the Class D notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is First Investors’ first securitization of 2013 and its tenth securitization overall.

First Investors is an experienced and capable originator and servicer of subprime auto loans. The company was founded 24 years ago and has benefited from a stable and experienced management team, which has managed its business through several economic cycles. In October 2012, First Investors was acquired by a company controlled by Aquiline Capital Partners LLC, a private equity firm that invests in the financial services sector. First Investors’ loan portfolio has performed well over the past several years in part due to its strong credit culture, tighter underwriting standards as well as stabilizing unemployment levels and a strong used car market.

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 First Investors’ historical static pool data. KBRA also conducted an operational assessment on the originator and servicer, 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.

For complete details on the analysis, please see our Pre-Sale Report, First Investors Auto Owner Trust 2013-1, which was published today at www.krollbondratings.com.

Preliminary Ratings Assigned: First Investors Auto Owner Trust 2013-1
Class	Rating	Expected Initial Class Principal
A-1	K1+(sf)	$26,200,000
A-2	AAA(sf)	$126,400,000
B	AA(sf)	$10,000,000
C	A(sf)	$15,000,000
D	BBB(sf)	$9,400,000

17g-7 Disclosure:

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: First Investors Auto Owner Trust 2013-1 17g-7 Disclosure report.

Related Publications:

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).