Kroll Bond Rating Agency Assigns Preliminary Ratings to GLS Auto Receivables Trust 2017-1

NEW YORK--()--Kroll Bond Rating Agency (“KBRA”) assigns preliminary ratings to five classes of notes issued by GLS Auto Receivables Trust 2017-1 (“GCAR 2017-1”), an auto loan ABS transaction.

GLS Auto Receivables Trust 2017-1 (“GCAR 2017-1” or the “Issuer”) will issue five classes of notes totaling $208.65 million that are collateralized by a pool of fixed rate retail automobile contracts, made to subprime obligors, secured by new and used non-commercial automobiles. The preliminary ratings reflect the initial credit enhancement levels ranging from 44.30% for the Class A notes to 11.80% for the Class D notes, which build to 52.40% and 19.90% for the Class A and Class D notes, respectively, over time. Credit enhancement is comprised of overcollateralization, subordination of junior note classes, a cash reserve account and excess spread.

This transaction represents Global Lending Services LLC’s (“GLS” or the “Company”) first term ABS securitization of 2017 and fourth overall. GLS’s inaugural securitization was a private, unrated term securitization that closed in 2014. It issued its second securitization in 2015 and its third securitization in 2016 and both of those were rated by KBRA. GLS is a subprime auto finance company that was founded in October 2011 and is backed by its founder Doug Duncan and BlueMountain Capital Management. GLS benefits from a capable management team that has extensive experience in the auto finance industry.

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 GLS’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, GLS Auto Receivables Trust 2017-1 Pre-Sale Report, which was published today at www.kbra.com.

Preliminary Ratings Assigned: GLS Auto Receivables Trust 2017-1

           
Class       Rating      

Expected Initial Principal
Balance

A-1       K1+ (sf)       $27,000,000
A-2       AA (sf)       $105,630,000
B       A (sf)       $29,230,000
C       BBB (sf)       $25,730,000
D       BB (sf)       $21,060,000
 

Related Publications:

Follow us on Twitter!
@KrollBondRating

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:
Jenny Ovalle, Associate Director
(646) 731-2309
jovalle@kbra.com
or
William Carson, Director
(646) 731-2405
wcarson@kbra.com
or
Andrew Silverhardt, Analyst
(646) 731-2492
asilverhardt@kbra.com
or
Rosemary Kelley, Senior Managing Director
(646) 731-2337
rkelley@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Jenny Ovalle, Associate Director
(646) 731-2309
jovalle@kbra.com
or
William Carson, Director
(646) 731-2405
wcarson@kbra.com
or
Andrew Silverhardt, Analyst
(646) 731-2492
asilverhardt@kbra.com
or
Rosemary Kelley, Senior Managing Director
(646) 731-2337
rkelley@kbra.com