NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by GLS Auto Receivables Issuer Trust 2018-2 (“GCAR 2018-2”), an auto loan ABS transaction.
GLS Auto Receivables Issuer Trust 2018-2 (“GCAR 2018-2” or “the Issuer”) issued four classes of notes totaling $299.39 million. The notes are backed by a pledge of assets of the Issuer and the underlying trust, the assets will include a certificate representing the entire beneficial ownership in the underlying trust. The assets of the underlying trust will include a pool of fixed rate retail automobile contracts, made to subprime obligors, who generally have a credit bureau score ranging from 470 to 620, secured by new and used non-commercial automobiles.
The preliminary ratings reflect the initial credit enhancement levels ranging from 47.00% for the Class A notes to 9.50% for the Class D notes, which build to 58.50% and 21.00% 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”) second term ABS securitization of 2018 and sixth overall. GLS’s inaugural securitization was a private, unrated term securitization that closed in 2014. 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 Global 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 Issuer Trust 2018-2 Pre-Sale Report, published June 7, 2018.
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Preliminary Ratings Assigned: GLS Auto Receivables Issuer Trust 2018-2 |
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| Class | Preliminary Rating | Principal Balance | ||
| A | AA (sf) | $176,690,000 | ||
| B | A (sf) | $52,840,000 | ||
| C | BBB (sf) | $39,590,000 | ||
| D | BB- (sf) | $30,270,000 | ||
Representations & Warranties 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 available here.
Related Publications: (available at www.kbra.com)
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
