NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of Flagship Credit Auto Trust 2014-2 (“FCAT 2014-2”), a subprime auto asset-backed securities transaction.
The collateral in the FCAT 2014-2 deal will include approximately $268.0 million of loans at closing. The transaction includes a prefunding feature that allows up to 20% of the collateral pool to be purchased up to three months after the closing date. The preliminary ratings reflect the initial credit enhancement levels ranging from 29.75% for the Class A notes to 3.50% for the Class E notes, which build to 35.00% and 8.75% for the Class A and Class E notes, respectively. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread.
Flagship Credit Acceptance (“FCA”) is an experienced originator and servicer of subprime auto loans. FCA and its predecessor, Flagship Credit Corporation have originated and serviced subprime auto loans for over 7 years. FCA is majority owned by Perella Weinberg Partners who purchased Flagship in 2010.
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 FCA’s historical static pool data. KBRA also conducted an operational assessment of FCA, 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.
Preliminary Ratings Assigned: Flagship Credit Auto Trust 2014-2
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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: https://www.krollbondratings.com/show_report/1583.
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).