American Credit Acceptance Receivables Trust is preparing to issue $355.72 million in asset-backed securities from a pool of subprime automobile loan receivables.
Known as ACAR 2023-3, the transaction will repay investors through five classes of senior-subordinate notes. American Credit Acceptance, which originated the loans, is sponsoring the transaction and will service the notes, according to ratings analysts from S&P Global Ratings. Wells Fargo Bank is the bank account provider on the deal, according to the rating agency.
ACAR 2023-3's collateral characteristics appears to be comparable, generally, to the same as those in ACAR 2023-2, S&P said, helping account for an estimated cumulative net loss expectation of 27.25%. The ECNL remained unchanged from ACAR 2023-2, according to the rating agency.
Classes A, B, C, D and E are expected to have credit support of 64.4%, 57.6%, 46.4%, 37.7% and 33.1%, respectively. Those support levels include hard credit enhancement and a haircut to excess spread, the rating agency said. The credit support levels provide at least 2.35x, 2.10x, 1.70x, 1.37x and 1.20x, on classes A through E, respectively.
In terms of additional credit enhancement, the notes have pre-pricing excess spread decreased to about 13.39%, compared to 13.73% on the previous transaction, according to S&P.
S&P says it plans to assign ratings of 'AAA' to the transaction's $158.94 million, class A notes, its only senior class; 'AA' to the $37.4 million class B notes; 'A' to the class C notes; 'BBB' to the $57.38 million to the class D notes; and 'BB-' to the class E notes.
