KBRA Assigns Preliminary Ratings to Skopos Auto Receivables Trust 2018-1

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of Notes issued by Skopos Auto Receivables Trust 2018-1 (“SKOP 2018-1”), an auto loan ABS transaction.

SKOP 2018-1 is collateralized by approximately $157 million of subprime auto loan receivables at closing out of an expected collateral balance of approximately $177.0 million after completion of the prefunding period. The transaction includes a prefunding feature that allows up to $20 million, or 11.3%, of the collateral pool to be funded after closing. The prefunding period is two months. The final ratings reflect the initial credit enhancement levels of 58.55% for the Class A notes, 46.65% for the Class B notes, 31.35% for the Class C notes and 19.00% for the Class D notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is Skopos Financial, LLC’s (“Skopos”) second rated term ABS securitization. Skopos issued its inaugural, rated ABS transaction, Skopos Auto Receivables Trust 2015-2, in April 2015.

Skopos is an indirect automobile finance company that has been in business since 2012. As of January 31 2018, the Company has 86 full time employees and has purchased automobile loan contracts originated by dealers in 21 states by leveraging its relationships with over 2,300 dealers. The Company is also servicing a portfolio with an aggregate outstanding balance of $281 million. Skopos provides automobile loans to subprime customers who have experienced prior credit difficulties or have limited credit histories with credit bureau scores typically ranging from 475 to 620. The Company has an experienced, capable management team, many of which were previously involved in building a deep-subprime, nationwide automotive finance lender while at Drive Financial.

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 Skopos’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.

For complete details on the analysis, please see KBRA’s pre-sale report, Skopos Auto Receivables Trust 2018-1, which was published today at www.kbra.com.

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

Analytical:
Kroll Bond Rating Agency
Haksun Kim, 646-731-2412
Director
hkim@kbra.com
or
Eric Neglia, 646-731-2456
Managing Director
eneglia@kbra.com
or
Brendan Carter, 646-731-3315
Associate
bcarter@kbra.com
or
Michael Polvere, 646-731-3339
Analyst
mpolvere@kbra.com

Contacts

Analytical:
Kroll Bond Rating Agency
Haksun Kim, 646-731-2412
Director
hkim@kbra.com
or
Eric Neglia, 646-731-2456
Managing Director
eneglia@kbra.com
or
Brendan Carter, 646-731-3315
Associate
bcarter@kbra.com
or
Michael Polvere, 646-731-3339
Analyst
mpolvere@kbra.com