NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of notes issued by American Credit Acceptance Receivables Trust 2021-3 (“ACAR 2021-3”), an asset-backed securitization collateralized by a pool of auto loans.
ACAR 2021-3 will issue six classes of notes totaling $460.00 million. The structure and collateral for ACAR 2021-3 are generally similar with the previous ACAR 2021-2 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 58.65% for the Class A Notes through 7.00% 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 third securitization of 2021 and its 35th 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.
- Auto Loan ABS Global Rating Methodology
- Global Structured Finance Counterparty Methodology
- ESG Global Rating Methodology
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. 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. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.
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Jenny Ovalle, Director
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Eric Neglia, Senior Managing Director (Rating Committee Chair)
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