Kroll Assigns Ratings to Auto Loan ABS

By Staff Writer January 12, 2021

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of notes issued by First Investors Auto Owner Trust 2021-1, an asset-backed securitization collateralized by a pool of auto loans.

FIAOT 2021-1 will issue six classes of notes totaling $231 million. The transaction includes a three-month prefunding feature that allows up to $46.2 million or 20 percent of the collateral pool to be funded after closing. The preliminary ratings reflect the initial credit enhancement levels of 27.75 percent for the Class A notes, 20.25 percent for the Class B notes, 11.50 percent for the Class C notes, 8.00 percent for the Class D notes, 4.25 percent for the Class E notes, and 1.50 percent for the Class F notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is First Investors’ first securitization in 2021 and its 28th securitization since 2002.

KBRA applied its Auto Loan ABS Global Rating Methodology and Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and First Investors’ 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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Last modified on Thursday, 14 January 2021 14:48