Kroll Bond Rating Agency Assigns Preliminary Ratings to First Investors Auto Owner Trust 2014-3

NEW YORK--()--Kroll Bond Rating Agency (“KBRA”) assigns preliminary ratings to four classes of First Investors Auto Owner Trust 2014-3 (“FIAOT 2014-3”), an auto loan ABS transaction.

FIAOT 2014-3 is expected to be collateralized by approximately $190.0 million of subprime auto loan receivables at closing out of an expected collateral balance of approximately $220.0 million after completion of the prefunding period. The transaction includes a prefunding feature that allows up to $30.0 million or 13.6% of the collateral pool to be funded after closing. The prefunding period is three months but is expected to be completed in December 2014. The preliminary ratings reflect the initial credit enhancement levels of 20.59% for the Class A notes, 16.05% for the Class B notes, 8.32% 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’ third securitization in 2014 and its fifteenth securitization overall.

First Investors is an experienced and capable originator and servicer of subprime auto loans. The company was founded over 25 years ago and has benefited from a stable and experienced management team, which has managed its business through several economic cycles. First Investors’ loan portfolio has performed well over the past several years in part due to the company’s 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 KBRA’s Pre-Sale Report, First Investors Auto Owner Trust 2014-3 Pre-Sale Report, which was published today at www.kbra.com.

Preliminary Ratings Assigned: First Investors Auto Owner Trust 2014-3

Class     Rating     Expected Initial Principal Balance
A-1     K1+(sf)     $29,500,000
A-2     AAA(sf)     $90,000,000
A-3     AAA(sf)     $58,500,000
B     AA(sf)     $10,000,000
C     A(sf)     $17,000,000
D     BBB(sf)     $15,000,000
 

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 2014-3 17g-7 Disclosure Report

Related Publications:
U.S. Auto Loan ABS Rating Methodology

About Kroll Bond Rating Agency
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).

Contacts

Analytical:
Kroll Bond Rating Agency
Rosemary Kelley, 646-731-2337
rkelley@kbra.com
or
William Carson, 646-731-2405
wcarson@kbra.com

Contacts

Analytical:
Kroll Bond Rating Agency
Rosemary Kelley, 646-731-2337
rkelley@kbra.com
or
William Carson, 646-731-2405
wcarson@kbra.com