KBRA Assigns Preliminary Ratings to Notes Issued by Westlake Automobile Receivables Trust 2018-1

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Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to eight classes of notes issued by Westlake Automobile Receivables Trust 2018-1 (WLAKE 2018-1), an auto loan ABS transaction.

WLAKE 2018-1 is collateralized by approximately $750 million of subprime auto loan receivables as of November 30, 2017. The preliminary ratings reflect the initial credit enhancement levels of 80.18% for the Class A-1 notes, 43.50% for the Class A-2 notes, 34.90% for the Class B notes, 24.00% for the Class C notes, 13.80% for the Class D notes, 9.50% for the Class E notes, and 4.00% for the Class F notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is Westlake’s first securitization of 2018 and its fifteenth securitization overall.

Westlake specializes in the acquisition and servicing of subprime, near-prime, and prime automobile retail installment contracts. The company was founded was founded in 1978 and has benefitted from a stable and experienced management team, which has managed its business through several economic cycles.

KBRA applied its Auto Loan ABS methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and First Investors’ historical static pool data. KBRA also conducted an operational assessment on the originator and servicer, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.

For complete details on the analysis, please see KBRA’s pre-sale report, Westlake Automobile Receivables Trust 2018-1 Pre-Sale Report, which was published today at www.kbra.com.

Preliminary Ratings Assigned: Westlake Automobile Receivables Trust 2018-1

      Class       Rating      

Expected Initial Principal

      A-1       K1+ (sf)       $161,000,000
      A-2-A*       AAA (sf)       $141,785,000
      A-2-B*       AAA (sf)       $141,785,000
      B       AA (sf)       $66,500,000
      C       A (sf)       $84,280,000
      D       BBB (sf)       $78,870,000
      E       BB (sf)       $33,250,000
      F       B (sf)       $42,530,000

*Class A-2 will be split fix/floating. For rating purposes, KBRA assumes 50% of the A-2 will be issued as uncapped floating-rate.

Representations & Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report available here.

Related Publications: (available at www.kbra.com)

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

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Business Wire: 19:06 GMT Wednesday 10th January 2018

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