CarFinance Offers First ABS Since Merger
CarFinance Capital LLC has come to market for the first time in 2015 with a $265.9 million securitization backed by subprime auto loans today, according to pre-sale report from Kroll Bond Rating Agency.
The loans in the 2015-1 trust have a weighted average Fico of 603, unchanged from the last 2014-2 trust, and a weighted average seasoning of 2 months, also unchanged from the previous issuance. The portion of loans for new vehicles stands at 28.84%, while 71.16% were used.
This deal also contains a higher portion of loans originated by the indirect program, 71.91% — versus 28.09% from the direct program — than in previous deals. The indirect loans have higher losses than direct loans, according to KBRA.
In the report, KBRA wrote that “CarFinance has been originating and servicing loans on this platform for over three years but is less established than many other subprime auto loan issuers.” However, it favorably views the experienced management team and the large proportion of employees with prior experience working under that team.
The 2015-1 trust is the Irvine, Ca. based subprime auto lender’s 6th issuance since the company’s inaugural securitization in August 2012. This was a private, unrated term securitization which has since been repaid, according to the report.
In November 2014 it was announced that CarFinance would merge with Perella Weinberg Partners’ other origination and servicing firm, Flagship Credit Acceptance. The deal was finalized on January 1, with Michael Ritter serving as the new chief executive. The combined entity has a managed portfolio of almost $1.9 billion and $110 million of monthly originations as of December 31, 2014, according to KBRA’s report.
