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Kroll Bond Rating Agency Assigns Preliminary Ratings to Flagship Credit Auto Trust 2017-1


Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of Flagship Credit Auto Trust 2017-1 (FCAT 2017-1), a subprime auto asset-backed securities transaction.

The collateral in the FCAT 2017-1 deal will include approximately $250.61 million of loans at closing.

The transaction includes a prefunding feature that allows up to 20% of the collateral pool to be purchased up to April 1, 2017. The ratings reflect the initial credit enhancement levels ranging from 47.73% for the Class A notes to 5.75% for the Class E notes, which build to 52.48% and 10.50% for the Class A and Class E notes, respectively.

This transaction includes loans originated from both the Flagship Credit Acceptance (FCA) and CarFinance Capital LLC (CarFinance) branded origination channels. On January 1, 2015, Perella Weinberg Partners’ Asset Based Value Strategy (PWP) closed a merger of its two auto loan platforms, FCA and CarFinance. FCA’s management team, led by Mike Ritter, has combined the FCA and CarFinance operations over the past two years following the merger.

KBRA applied its U.S. 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 Presale Report, Flagship Credit Auto Trust 2017-1 Presale Report, which was published today at www.kbra.com.

Preliminary Ratings Assigned: Flagship Credit Auto Trust 2017-1

Class       Rating       Expected Initial Class Principal
A       AAA(sf)       $170,000,000
B       AA(sf)       $44,600,000
C       A(sf)       $36,000,000
D       BBB(sf)       $28,660,000
E       BB(sf)       $22,260,000

Related Publications:

U.S. Auto Loan ABS Rating Methodology

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

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