KBRA Assigns Preliminary Ratings to Notes Issued by Westlake Automobile Receivables Trust 2020-1

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to eight classes of notes issued by Westlake Automobile Receivables Trust 2020-1 (WLAKE 2020-1), an auto loan ABS transaction.

The notes are collateralized by a pool of fixed rate retail automobile contracts, made to subprime, near prime and prime obligors and secured by new and used automobiles, sport utility vehicles, light duty trucks and vans. The preliminary ratings reflect the initial credit enhancement levels of 40.45% for the Class A-1 and A-2 notes, 31.95% for the Class B notes, 19.55% for the Class C notes, 10.05% for the Class D notes, 5.90% for the Class E notes, and 1.60% for the Class F notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is Westlake’s first securitization of 2020 and its 21st securitization overall.

Westlake specializes in the acquisition and servicing of subprime, near-prime, and prime automobile retail installment contracts. The company was founded was founded in 1978 and has benefitted from a stable and experienced management team, which has managed its business through several economic cycles.

KBRA applied its Auto Loan ABS methodology and Structured Finance Counterparty methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Westlake’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.

Preliminary Ratings Assigned: Westlake Automobile Receivables Trust 2020-1
Class	Preliminary Rating	Initial Principal Balance
A-1	K1+ (sf)	$162,000,000
A-2-A*	AAA (sf)	$177,900,000
A-2-B*	AAA (sf)	$177,900,000
B	AA+ (sf)	$ 72,680,000
C	A (sf)	$106,030,000
D	BBB+ (sf)	$ 81,230,000
E	BB+ (sf)	$ 35,480,000
F	B+ (sf)	$ 36,780,000

*Class A-2 will be split fix/floating. For rating purposes, KBRA assumes 50% of the A-2 will be issued as uncapped floating-rate.

To access ratings, reports and disclosures, click here.

Related Publications:

• Westlake Automobile Receivables Trust 2020-1 Pre-Sale Report
• Global Auto Loan ABS Rating Methodology
• Global Structured Finance Counterparty Methodology

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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.