KBRA Assigns Preliminary Ratings to Tidewater Auto Receivables Trust 2018-A

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

TMCAT 2018-A is collateralized by approximately $170.8 million of subprime auto loan receivables as of March 31, 2018 out of an expected collateral balance of approximately $185.3 million after completion of the prefunding period. The transaction includes a prefunding feature that allows up to $55 million or 29.7% of the collateral pool to be funded after closing. The prefunding period is five months. The preliminary ratings reflect the initial credit enhancement levels of 42.10% for the Class A notes, 34.30% for the Class B notes, 22.45% for the Class C notes, 14.75% for the Class D notes and 9.35% for the Class E notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is Tidewater’s first securitization in 2018 and its eighth securitization overall.

Tidewater Finance Company is a privately held consumer finance company that was established in 1992 to originate and service retail installment contracts. Tidewater has an experienced, capable management team that has significant experience in all aspect of consumer lending. Senior members of Tidewater have diverse backgrounds, with experience in motor credit originations and underwriting, consumer risk, servicing/collections, dealer relations, marketing, and corporate finance.

Tidewater is an experienced servicer of subprime consumer receivables and operates collections and servicing in its Virginia Beach, VA office and its Henderson, NV servicing center.

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 Tidewaters’ 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.

 

Preliminary Ratings Assigned: Tidewater Auto Receivables Trust 2018-A

    Class   Preliminary Rating   Initial Principal Balance
    A-1   K1+ (sf)   $30,700,000
    A-2   AAA (sf)   $79,390,000
    B   AA (sf)   $14,456,000
    C   A+ (sf)   $21,963,000
    D   BBB (sf)   $14,271,000
    E   BB (sf)   $10,008,000

*Class F ($5,560,000) is unrated and calculated as part of O/C

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 Contacts:
Haksun Kim, Director
(646) 731-2412
hkim@kbra.com
or
Jenny Ovalle, Director
(646) 731-2309
jovalle@kbra.com
or
Michael Polvere, Analyst
(646) 731-3339
mpolvere@kbra.com
or
Rosemary Kelley, Senior Managing Director
(646) 731-2337
rkelley@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Haksun Kim, Director
(646) 731-2412
hkim@kbra.com
or
Jenny Ovalle, Director
(646) 731-2309
jovalle@kbra.com
or
Michael Polvere, Analyst
(646) 731-3339
mpolvere@kbra.com
or
Rosemary Kelley, Senior Managing Director
(646) 731-2337
rkelley@kbra.com