KBRA Assigns Preliminary Ratings to Flagship Credit Auto Trust 2024-1
3 Apr 2024 | New York
KBRA assigns preliminary ratings to five classes of notes (seven tranches) issued by Flagship Credit Auto Trust 2024-1 (“FCAT 2024-1”), an asset-backed securitization collateralized by a pool of auto loans.
FCAT 2024-1 will issue five classes of notes (seven tranches) totaling $347.04 million, collateralized by a pool of auto loan contracts originated on (1) an indirect basis mainly through franchise auto dealers and (2) a direct basis from online aggregators and other fulfillment partners. The transaction has initial hard credit enhancement levels of 40.60% for the Class A Notes through 4.60% for the Class E Notes. Credit enhancement consists of overcollateralization, subordination (except for the Class E Notes), a reserve account funded at closing, and excess spread.
FCAT 2024-1 represents the first term ABS securitization in 2024 for FC HoldCo LLC, the parent company of Flagship Credit Acceptance LLC (“Flagship”) and CarFinance Capital LLC. The underlying auto loans supporting FCAT 2024-1 were originated by Flagship and CarFinance Capital LLC and are serviced by Flagship.
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 Flagship, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.
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