KBRA Assigns Preliminary Ratings to Notes Issued by Avid Automobile Receivables Trust 2018-1

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Avid Automobile Receivables Trust 2018-1 (“AVID 2018-1”), an auto loan ABS transaction.

AVID 2018-1 is collateralized by approximately $95.0 million of subprime auto loan receivables as of December 31, 2017 out of an expected collateral balance of approximately $120.0 million after completion of the prefunding period. The transaction includes a prefunding feature that allows up to $25.0 million or 20.8% of the collateral pool to be funded after closing. The prefunding period is until June 30, 2018. The preliminary ratings reflect the initial credit enhancement levels of 24.65% for the Class A notes, 14.30% for the Class B notes, 6.00% for the Class C notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is Avid Acceptance, LLC (“Avid” or the “Company”)’s inaugural securitization.

Avid is a Salt Lake City, Utah based consumer finance company that was established in 2009 to purchase and service retail automobile contracts originated by franchised and select independent dealers within the United States. Avid provides automobile loans to credit-impaired buyers who have been identified as having offsetting strengths such as stable employment, income and residential history. Avid is a part of the Quorus Group, an association of companies with shared ownership that provide a range of financing and servicing solutions to client throughout the United States. Scott Scharman, Avid’s CEO, is the owner of the Quorus Group. Other companies in the Quorus Group include Tetra Financial Group, an equipment finance firm, and Quorus Commercial, a commercial real estate financing firm.

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 Avid’ historical static pool data. KBRA also conducted an on-site operational review of Avid at its Salt Lake City, UT headquarters in November 2017. KBRA will 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, Avid Automobile Receivables Trust 2018-1, which was published today at www.kbra.com.

Preliminary Ratings Assigned: Avid Automobile Receivables Trust 2018-1

Class     Rating     Initial Principal Balance
A     A (sf)     $91,651,000
B     BBB (sf)     $12,425,000
C     BB (sf)     $9,963,000
       

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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About KBRA and KBRA Europe

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.

Contacts

Kroll Bond Rating Agency
Analytical:
Haksun Kim, 646-731-2412
Director
hkim@kbra.com
or
William Carson, 646-731-2405
Senior Director
wcarson@kbra.com
or
Rosemary Kelley, 646-731-2337
Senior Managing Director
rkelley@kbra.com
or
Andrew Silverhardt, 646-731-2492
Analyst
asilverhardt@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical:
Haksun Kim, 646-731-2412
Director
hkim@kbra.com
or
William Carson, 646-731-2405
Senior Director
wcarson@kbra.com
or
Rosemary Kelley, 646-731-2337
Senior Managing Director
rkelley@kbra.com
or
Andrew Silverhardt, 646-731-2492
Analyst
asilverhardt@kbra.com