KBRA Assigns Ratings to Carvana Auto Receivables Trust 2024-N3
24 Sep 2024 | New York
KBRA assigns ratings to seven classes of notes issued by Carvana Auto Receivables Trust 2024-N3 (“CRVNA 2024-N3”), a non-prime auto loan ABS transaction. The transaction has initial hard credit enhancement levels ranging from 46.35% for the Class A notes to 1.90% for the Class E notes. Credit enhancement consists of overcollateralization, excess spread, subordination (except for the Class E notes) and a cash reserve account funded at closing.
CRVNA 2024-N3 represents the fifth term ABS securitization for Carvana, LLC (“Carvana” or the “Company”) in 2024, the 13th under its non-prime shelf, and the 32nd overall. CRVNA 2024-N3 issued $536.28 million of notes across seven rated classes of notes and five unrated classes of exchangeable notes. The transaction is collateralized by $539.80 million of automobile loans to primarily non-prime obligors as defined by the Company.
Carvana was launched out of DriveTime Automotive Group Inc. in 2012 as an eCommerce platform for buying used vehicles. Carvana, through its website (www.Carvana.com), offers a unique used vehicle buying experience that enables customers to purchase and finance vehicles online through an efficient and transparent process. Initially launched in Atlanta, Georgia, Carvana has expanded nationally and is now operating in over 300 markets. Carvana’s business and operations fully integrate all steps of the vehicle purchase process including vehicle acquisition, trade-in, financing, and delivery.
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 Carvana’s historical static pool data. KBRA considered its operational review of Carvana as well as periodic update calls with the Company. Operative agreements and legal opinions were reviewed prior to closing.
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