Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes issued by Flagship Credit Auto Trust 2018-4 (FCAT 2018-4), an auto loan ABS transaction.
As of the October 31, 2018 initial cutoff date, FCAT 2018-4 contained $239.97 million of receivables originated from both the Flagship Credit Acceptance (FCA) and CarFinance Capital LLC (CarFinance) branded origination channels and will contain $299.96 million after completion of the prefunding period. The transaction includes a prefunding feature that allows up to 20% of the collateral pool to be funded until two months after closing. The preliminary ratings reflect the initial credit enhancement levels of 37.40% for the Class A notes, 28.90% for the Class B notes, 17.65% for the Class C notes, 8.55% for the Class D notes and 1.85% for the Class E notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserve account and excess spread. The transaction is the fourth term ABS securitization in 2018 for the Company and its twenty-fifth securitization overall.
KBRA applied its Global Auto Loan ABS methodology as part of its analysis of the transactions underlying collateral pool, the proposed capital structure and Flagships historical static pool data. KBRA also conducted an operational assessment on the originator and servicer, as well as a review of the transactions legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.
Preliminary Ratings Assigned: Flagship Credit Auto Trust 2018-4
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Related Publications: (available at www.kbra.com)
- Flagship Credit Auto Trust 2018-4 Pre-Sale Report
- Flagship Credit Auto Trust 2018-4 Pre-Sale Report Flagship Credit Auto Trust 2018-4 Peer Comparison
- Global Auto Loan ABS Rating Methodology
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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 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, is 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.
Kroll Bond Rating Agency
William Carson, 646-731-2405
Mikhalevsky, CFA, 646-731-3356
Senior Managing Director