A new securitization of subprime auto loans is around the corner.

CarFinance Capital is prepping a $303.8-million deal consisting of five tranches, according to a presale report by Kroll Bond Rating Agency. The class A piece, for $201.5 million, has an expected maturity of four years, a credit enhancement of 37% and a rating from Kroll of ‘AA-(sf).’

The B piece is $60.5 million and has a six-year maturity, 17.5% enhancement and a ‘A(sf)’ rating. The C piece is $18.6 million and has a six-year maturity, 11.5% enhancement and a ‘BBB+(sf)’ rating. The D piece is $10.9 million and has a six-year maturity, 8% enhancement and a ‘BBB-(sf)’ rating. The E piece is $12.4 million and has a 7-year maturity, 4% enhancement, and a ‘BB(sf)’ rating.

Among the deal’s weaknesses is the limited performance date for loans originated by CarFinance; the firm has only been lending since May 2011. This risk, in Kroll’s view, is mitigated by the seasoned managers running the company. The firm is majority-owned by affiliated funds of Perella Weinberg Partners’ Asset Based Value Strategy.

The trustee of the deal is Wilmington Trust and the backup servicer is Wells Fargo Bank.

The deal is the second asset-backed from CarFinance this year, and third overall. The company’s first deal, in August 2012, was unrated.   

 

 

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