NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes issued by First Investors Auto Owner Trust 2017-2 (FIAOT 2017-2), an auto loan ABS transaction.
FIAOT 2017-2 is collateralized by approximately $202 million of subprime auto loan receivables as of June 30, 2017 out of an expected collateral balance of approximately $227 million after completion of the prefunding period. The transaction includes a prefunding feature that allows up to $25 million or 11% of the collateral pool to be funded after closing. The prefunding period is three months but is expected to be completed well in advance of the three months based on current origination volume. The preliminary ratings reflect the initial credit enhancement levels of 29.50% for the Class A notes, 23.29% for the Class B notes, 14.30% for the Class C notes, 7.03% for the Class D notes, and 1.75% for the Class E notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is First Investors’ second securitization in 2017 and its twenty first securitization overall.
First Investors is an experienced and capable originator and servicer of subprime auto loans. The company was founded over 27 years ago and has benefitted from a stable and experienced management team, which has managed its business through several economic cycles.
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 First Investors’ 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, First Investors Auto Owner Trust 2017-2 Pre-Sale Report, which was published today at www.kbra.com.
Preliminary Ratings Assigned: First Investors Auto Owner Trust 2017-2
| Class | Rating | Expected Initial Principal Balance | ||||
| A-1 | AAA (sf) | $130,000,000 | ||||
| A-2 | AAA (sf) | $33,440,000 | ||||
| B | AA+ (sf) | $14,100,000 | ||||
| C | A (sf) | $20,400,000 | ||||
| D | BBB+ (sf) | $16,500,000 | ||||
| E | BB+ (sf) | $11,990,000 | ||||
Related Publications:
U.S.
Auto Loan ABS Rating Methodology
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).
