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NEW YORK–(BUSINESS WIRE)–#KBRA–KBRA assigns preliminary ratings to five classes of notes issued by Avid Automobile Receivables Trust 2023-1 (“AVID 2023-1”), an asset-backed securitization collateralized by a pool of auto loans.
AVID 2023-1 will issue six classes of notes totaling $136.741 million. This transaction represents the first term ABS securitization in 2023 and fourth overall for Avid Acceptance, LLC (“Avid” or the “Company”). The notes are backed by a pool of retail automobile contracts made to subprime obligors, many of which have filed for bankruptcy (Chapter 7 or 13) and have decided to purchase a vehicle prior to the closing or discharge of their bankruptcy case. This transaction includes a prefunding account that will be used to purchase additional receivables up to the sum of approximately 21% of the closing date pool balance plus the expected balance of the subsequent receivables purchased for up to six months after closing. The transaction has initial credit enhancement levels ranging from 60.83% for the Class A notes to 17.35% for the Class F notes, respectively. The target enhancement levels for the Class A notes and Class F notes are 66.94% and 23.45%, respectively. KBRA does not rate the Class F notes.
Avid was established in 2009 to purchase and service retail automobile contracts originated by franchised and select independent dealers within the United States. Avid is a part of the Avtech Financial Group (“Avtech”), which is owned by Avid’s co-founder and Chairman Scott Scharman.
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 static pool data and the underlying collateral pool and stressed the capital structure based upon its stress case cash flow assumptions. KBRA considered its operational review of Avid, as well as several business updates with the Company since that time. Operative agreements and legal opinions will be reviewed prior to closing.
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.
Maxim Berger, Director (Lead Analyst)
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Jacob Paulose, Associate Director
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Jaykumar Shiyani, Senior Analyst
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Rosemary Kelley, Senior Managing Director (Rating Committee Chair)
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Business Development Contact
Ted Burbage, Managing Director
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