KBRA Assigns Preliminary Ratings to Carvana Auto Receivables Trust 2021-N4

NEW YORK–(BUSINESS WIRE)–#KBRA–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of notes issued by Carvana Auto Receivables Trust 2021-N4 (“CRVNA 2021-N4”), an auto loan ABS transaction.

CRVNA 2021-N4 represents the seventh term ABS securitization for Carvana, LLC (“Carvana” or the “Company”) in 2021, the fifth under its non-prime shelf, and the thirteenth overall. CRVNA 2021-N4 will issue six classes (seven tranches) of notes totaling $481.16 million. The transaction is collateralized by approximately $420 million of automobile loans to primarily non-prime obligors as defined by the Company.

Carvana was launched out of DriveTime Automotive Group Inc. (“DriveTime”) 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 308 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 as well as publicly available static pool loss data for comparable auto loan originators. KBRA considered its operational review of Carvana, which was conducted at its Tempe, AZ headquarters in February 2019, as well periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.

Click here to view the report. To access ratings and relevant documents, click here.

Related Publications

• Auto Loan ABS Global Rating Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. 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.

Contacts

Analytical Contacts

Melvin Zhou, Senior Director (Lead Analyst)

+1 (646) 731-2412

melvin.zhou@kbra.com

Michael Pettigrew, Senior Analyst

+1 (646) 731-1208

michael.pettigrew@kbra.com

Eric Neglia, Senior Managing Director (Rating Committee Chair)

+1 (646) 731-2456

eric.neglia@kbra.com

Business Development Contact

Ted Burbage, Managing Director

+1 (646) 731-3325

ted.burbage@kbra.com