KBRA Assigns Preliminary Ratings to Notes Issued by Flagship Credit Auto Trust 2018-1

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes issued by Flagship Credit Auto Trust 2018-1 (“FCAT 2018-1”), an auto loan ABS transaction.

As of the January 11, 2018 statistical calculation date, FCAT 2018-1 contains $121.7 million of receivables and will contain approximately $164.6 million of receivables at closing out of an expected collateral balance of approximately $204.6 million after completion of the prefunding period. The transaction includes a prefunding feature that allows up to $40 million or 20% of the collateral pool to be funded after closing until April 20, 2018. The preliminary ratings reflect the initial credit enhancement levels of 42.01% for the Class A notes, 31.01% for the Class B notes, 19.01% for the Class C notes, 10.00% for the Class D notes and 4.25% for the Class E notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserve account and excess spread. The transaction is the first term ABS securitization in 2018 for the Company and its twenty second securitization overall.

This transaction includes loans originated from both the Flagship Credit Acceptance (FCA) and CarFinance Capital LLC (CarFinance) branded origination channels.

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 Flagship’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, Flagship Credit Auto Trust 2018-1, which was published today at www.kbra.com.

Preliminary Ratings Assigned: Flagship Credit Auto Trust 2018-1

Class       Preliminary Rating       Initial Principal Balance
A       AAA (sf)       $122,750,000
B       AA (sf)       $22,500,000
C       A (sf)       $24,560,000
D       BBB (sf)       $18,420,000
E       BB (sf)       $11,770,000
           

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:
William Carson, Senior Director
646-731-2405
wcarson@kbra.com
or
Alla Mikhalevsky, CFA, Associate Director
646-731-3356
amikhalevsky@kbra.com
or
Rosemary Kelley, Senior Managing Director
646-731-2337
rkelley@kbra.com
or
Andrew Silverhardt, Analyst
646-731-2492
asilverhardt@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical:
William Carson, Senior Director
646-731-2405
wcarson@kbra.com
or
Alla Mikhalevsky, CFA, Associate Director
646-731-3356
amikhalevsky@kbra.com
or
Rosemary Kelley, Senior Managing Director
646-731-2337
rkelley@kbra.com
or
Andrew Silverhardt, Analyst
646-731-2492
asilverhardt@kbra.com