Kroll Bond Rating Agency Assigns Preliminary Ratings to Westlake Automobile Receivables Trust 2016-3

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to seven classes of Westlake Automobile Receivables Trust 2016-3 (“WLAKE 2016-3”), an auto loan ABS transaction.

Westlake Automobile Receivables Trust 2016-3 (“WLAKE 2016-3” or the “Issuer”) will issue seven classes of notes totaling $550.0 million that are collateralized by a pool of fixed rate retail automobile contracts, made to subprime, near prime and prime obligors and secured by new and used automobiles, sport utility vehicles, light duty trucks and vans.

The preliminary ratings reflect the initial credit enhancement levels of 76.39% for the Class A-1 notes, 58.20% for the Class A-2A notes, 40.00% for the Class A-2B notes, 31.00% for the Class B notes, 20.25% for the Class C notes, 10.75% for the Class D notes and 7.00% for the Class E notes. Credit enhancement for the notes consists of the reserve account, overcollateralization, excess interest on the receivables and subordination (except for the Class E notes.)

This transaction is Westlake Services, LLC (“Westlake”)’s third securitization in 2016 and its 12th securitization overall. Westlake Services, LLC (“Westlake” or the “Company”) issued its first securitization in May 2010 and eleven total transactions that were supported by aggregate original collateral of approximately $4.2 billion. This is the first securitization that KBRA has rated for Westlake.

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 Westlake’s 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, Westlake Automobile Receivables Trust 2016-3 Pre-Sale Report, which was published today at www.kbra.com.

Preliminary Ratings Assigned: Westlake Automobile Receivables Trust 2016-3

Class     Preliminary Rating    

Expected Initial Principal
Balance

A-1     K1+(sf)     $144,000,000
A-2-A     AAA(sf)     $106,450,000
A-2-B     AAA(sf)     $106,450,000
B     AA(sf)     $52,660,000
C     A(sf)     $62,900,000
D     BBB(sf)     $55,590,000
E     BB(sf)     $21,950,000
       

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

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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

Kroll Bond Rating Agency
Analytical Contacts:
Eric Neglia, Senior Director
eneglia@kbra.com, (646) 731-2456
or
Jenny Ovalle, Associate Director
jovalle@kbra.com, (646) 731-2309
or
Ed Pagano, Analyst
epagano@kbra.com, (646) 731-2449
or
Rosemary Kelley, Managing Director
rkelley@kbra.com, (646) 731-2337

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Eric Neglia, Senior Director
eneglia@kbra.com, (646) 731-2456
or
Jenny Ovalle, Associate Director
jovalle@kbra.com, (646) 731-2309
or
Ed Pagano, Analyst
epagano@kbra.com, (646) 731-2449
or
Rosemary Kelley, Managing Director
rkelley@kbra.com, (646) 731-2337