KBRA Rates Subprime Auto Loan ABS

By Staff Writer September 25, 2022

KBRA assigned preliminary ratings to $118.805 million of notes issued by SAFCO Auto Receivables Trust, a subprime auto loan ABS transaction.

SAFCO 2022-1 will issue three classes of notes totaling $118.805 million. Credit enhancement on the notes is comprised of overcollateralization subordination of junior note classes, a cash reserve account, and excess spread.

This transaction is the inaugural ABS securitization for Southern Auto Finance Company. SAFCO is an indirect auto finance company founded in 1990 and headquartered in Pompano Beach, Fla. SAFCO specializes in auto financing for first-time buyers, as well as consumers seeking to rebuild credit and/or those with hard to verify incomes.

KBRA analyzed the transaction using the Auto Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology. In applying the methodology, KBRA analyzed SAFCO’s static pool data, the underlying collateral pool and the capital structure using stressed cash flow assumptions. KBRA considered its operational review of SAFCO at the Company’s headquarters in Pompano Beach, Fla., which was conducted in July 2022. Operative agreements and legal opinions will be reviewed prior to closing.

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Last modified on Monday, 26 September 2022 12:09