KBRA Assigns Preliminary Ratings to Avid Automobile Receivables Trust 2019-1

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes issued by Avid Automobile Receivables Trust 2019-1 (“AVID 2019-1”), an auto loan ABS transaction.

AVID 2019-1 is collateralized by approximately $115.3 million of subprime auto loan receivables as of the August 31, 2019 statistical cutoff date and is expected to contain $120.0 million at closing. The total receivables balance after the completion of the five-month prefunding period is expected to be $180.0 million. The preliminary ratings reflect the initial credit enhancement levels of 40.25% for the Class A notes, 22.25% for the Class B notes, 11.55% for the Class C notes, 5.75% for the Class D notes and 1.85% for the Class E notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is Avid Acceptance, LLC (“Avid” or the “Company”)’s second securitization.

Avid is a Salt Lake City, Utah based consumer finance company that was established in 2009 to purchase and service retail automobile contracts originated by franchised and select independent dealers within the United States. Typical Avid borrowers tend to have satisfactory tradelines or installment accounts prior to poor credit or bankruptcy as a result of a negative life event, such as medical problems, divorce, loss of employment. Since this event, the borrowers are demonstrating offsetting strengths such as stable employment, income and residential history. Avid is a part of the Avtech Financial Group (“Avtech”), which is owned by Avid’s co-founder and CEO Scott Scharman. Avtech is an association of companies with shared ownership that provide a range of equipment and commercial real estate financing and servicing solutions to clients throughout the United States. While ownership is shared across the various companies, each operates independently with separate management teams.

KBRA applied its Global Auto Loan ABS methodology and Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Avid’s historical static pool data. KBRA also conducted an on-site operational review of Avid at its Salt Lake City, UT headquarters in November 2017 and August 2019, as well as a review of the transaction’s legal structure and transaction documents. KBRA will review the operative agreements and legal opinions for the transaction prior to closing.

Preliminary Ratings Assigned: Avid Automobile Receivables Trust 2019-1

Class

Preliminary Rating

Initial Principal Balance

A

AA (sf)

$109,980,000

B

A- (sf)

$32,400,000

C

BBB- (sf)

$19,260,000

D

BB (sf)

$10,440,000

E

B (sf)

$7,020,000

To access ratings, reports and disclosures, click 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 designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is 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.

Contacts

Analytical Contacts:
William Carson, Senior Director

(646) 731-2405

[email protected]

Eric Neglia, Managing Director

(646) 731-2456

[email protected]

Andrew Silverhardt, Senior Analyst

(646) 731-2492

[email protected]

Business Development Contact:
Arielle Smelkinson, Director

(646) 731-2369

[email protected]

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