KBRA Assigns Ratings to Lendbuzz Securitization Trust 2024-2
26 Apr 2024 | New York
KBRA assigns ratings to three classes of notes (four tranches) issued by Lendbuzz Securitization Trust 2024-2 (“LBZZ 2024-2”), an auto loan ABS transaction. Credit enhancement on the notes is comprised of overcollateralization, subordination of junior note classes (except for the Class C Notes), a cash reserve account funded at closing, and excess spread.
LBZZ 2024-2 is Lendbuzz Funding LLC’s (“Lendbuzz” or the “Company”) second term ABS securitization in 2024 and the seventh overall. LBZZ 2024-2 issued three classes of notes (four tranches) totaling $215.72 million, which is collateralized by a pool of retail automobile contracts made to obligors and secured by new and used automobiles, light duty trucks, and vans.
Lendbuzz is a car financing company established in 2015, headquartered in Boston, MA, with a research division based in Tel Aviv, Israel. The Company’s founders launched the company after migrating to the U.S. for graduate school and finding that they could not access basic credit products because of a lack of credit history. Using alternative data and machine-learning algorithms to assess credit risk, Lendbuzz services a target consumer base that is typically unable to obtain financing from traditional lending sources such as credit unions, banks, and captive auto finance companies, despite sufficient verifiable income to support auto loan payments.
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 Lendbuzz’s historical static pool data. KBRA considered its operational review of the Company, as well periodic update calls with Lendbuzz. Operative agreements and legal opinions were reviewed prior to closing.
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