NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of American Credit Acceptance Receivables Trust 2019-2 (“ACAR 2019-2” or the “Issuer”), an auto loan ABS transaction.
ACAR 2019-2 will issue six classes of notes totaling $274.8 million that are collateralized by a pool of retail automobile contracts, made to subprime obligors and secured by new and used automobiles and motorcycles.
The structure for ACAR 2019-2 includes a prefunding account that will be used to purchase additional receivables up to 22% of the initial cutoff date pool balance and expected balance of the subsequent receivables for up to 3 months after closing. The transaction has initial credit enhancement levels of 64.10% for the Class A Notes through 9.90% for the Class F Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (except for the Class F Notes) and a reserve account funded at closing.
American Credit Acceptance, LLC (“ACA” or the “Company”) issued its first securitization in October 2011 and since then has issued 26 additional transactions in the total amount of approximately $5.52 billion. ACA is a subprime auto finance company that has been under current ownership since 2007.
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 ACA’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.
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Preliminary Ratings Assigned: American Credit Acceptance Receivables Trust 2019-2
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is 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.