KBRA Assigns Preliminary Ratings to Lendbuzz Securitization Trust 2024-3
4 Sep 2024 | New York
KBRA assigns preliminary ratings to four classes of notes issued by Lendbuzz Securitization Trust 2024-3 (“LBZZ 2024-3”), an auto loan ABS transaction. The preliminary ratings reflect the initial credit enhancement levels ranging from 24.70% for the Class A notes to 6.00% for the Class C notes. 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 2024-3 is Lendbuzz Funding LLC’s (“Lendbuzz” or the “Company”) third term ABS securitization in 2024 and the eighth overall. LBZZ 2024-3 will issue four classes of notes totaling $261.56 million. At closing, this transaction will consist of approximately $250.34 million receivables, with an expected collateral balance of $275.34 million after completion of the one-month prefunding period. LBZZ 2024-3 will be 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 as periodic update calls with Lendbuzz. Operative agreements and legal opinions will be reviewed prior to closing.
To access rating and relevant documents, click here.
Click here to view the report.