Kroll Bond Rating Agency has assigned preliminary ratings to five classes of notes issued by GLS Auto Receivables Issuer Trust 2021-3, an asset-backed securitization collateralized by a pool of auto loans.

GCAR 2021-3 will issue five classes of notes totaling $568.91 million. The transaction features a sequential payment structure where principal will be paid on each class of notes sequentially until each class is paid in full. GCAR 2021-3 has initial credit enhancement levels ranging from 52.05% for the Class A notes to 4.75% for the Class E notes. Credit enhancement is comprised of overcollateralization, subordination of junior note classes (except for the Class E notes), a cash reserve account and excess spread.

KBRA applied its Auto Loan ABS Global Rating Methodology and Global Structured Finance Counterparty Methodology as well as ESG Global Rating Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and GLS’s historical static pool data. KBRA considered its operational reviews of GLS, as well as periodic due diligence calls with GLS. Operative agreements and legal opinions will be reviewed prior to closing.