NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes issued by First Investors Auto Owner Trust 2017-3 (FIAOT 2017-3), an auto loan ABS transaction.
FIAOT 2017-3 is collateralized by approximately $129 million of subprime auto loan receivables as of October 31, 2017 out of an expected collateral balance of approximately $167 million after completion of the prefunding period. The transaction includes a prefunding feature that allows up to $38 million 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 30.05% for the Class A notes, 22.90% for the Class B notes, 13.51% for the Class C notes, 5.50% for the Class D notes, and 1.50% for the Class E notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is First Investors’ third securitization in 2017 and its twenty second securitization overall.
First Investors is an experienced and capable originator and servicer of subprime auto loans. The company was founded over 29 years ago and has benefitted from a stable and experienced management team, which has managed its business through several economic cycles.
KBRA applied its 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 2017-3 Pre-Sale Report, which was published today at www.kbra.com.
Preliminary Ratings Assigned: First Investors Auto Owner Trust 2017-3
Expected Initial Principal
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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