Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of notes issued by American Credit Acceptance Receivables Trust 2021-4 (“ACAR 2021-4”), an asset-backed securitization collateralized by a pool of auto loans.
ACAR 2021-4 will issue six classes of notes totaling $429.54 million. The structure and collateral for ACAR 2021-4 are generally similar with the previous ACAR 2021-3 transaction. However, key structural differences from the prior deal include lower enhancement for all classes, primarily driven by lower loss expectations. The transaction has initial hard credit enhancement levels of 55.90% for the Class A Notes through 6.50% for the Class F Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (except for the Class F Notes) and a reserve account funded at closing.
The transaction is American Credit Acceptance, LLC’s fourth securitization of 2021 and its 36th securitization since 2011.
KBRA applied its Auto Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and ACA’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. Operative agreements and legal opinions will be reviewed prior to closing.
