Kroll Bond Rating Agency Assigns Preliminary Ratings to American Credit Acceptance Receivables Trust 2017-2

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of American Credit Acceptance Receivables Trust 2017-2 (“ACAR 2017-2”), an auto loan ABS transaction.

American Credit Acceptance Receivables Trust 2017-2 (“ACAR 2017-2” or the “Issuer”) will issue five classes of notes totaling $220.1 million that are collateralized by a pool of retail automobile contracts, made to subprime obligors and secured by new and used automobiles and motorcycles.

The structure for ACAR 2017-2 includes a prefunding account that will be used to purchase additional receivables up to 22% of the initial cutoff date pool balance and expected balance of the subsequent receivables for up to 3 months after closing. The transaction has initial credit enhancement levels of 66.00% for the Class A Notes through 17.75% for the Class E Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (except for the Class E Notes) and a reserve account funded at closing.

American Credit Acceptance, LLC (“ACA” or the “Company”) issued its first securitization in October 2011 and since then has issued seventeen additional transactions in the total amount of approximately $3.5 billion. ACA is a subprime auto finance company that has been under current ownership since 2007.

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 ACA’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, American Credit Acceptance Receivables Trust 2017-2 Pre-Sale Report, which was published today at www.kbra.com.

Preliminary Ratings Assigned: American Credit Acceptance Receivables Trust 2017-2

       
Class     Preliminary Rating     Expected Initial Principal Balance
A     AAA(sf)     $93,300,000
B     AA(sf)     $25,630,000
C     A(sf)     $49,280,000
D     BBB(sf)     $39,420,000
E     BB(sf)     $12,480,000
 

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

Analytical Contacts:
Kroll Bond Rating Agency
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, Senior Managing Director
rkelley@kbra.com, (646) 731-2337

Contacts

Analytical Contacts:
Kroll Bond Rating Agency
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, Senior Managing Director
rkelley@kbra.com, (646) 731-2337