Carvana’s second auto-loan securitization launched this month will feature a pool of used-car loans originated since the start of the new year.
Carvana Auto Receivables Trust 2021-N1 has been assigned loans underwritten to consumers whose credit scores were in the lower internal credit-scoring tier for the Tempe, Ariz.-based lender and online vehicle sales company.
The deal follows last week’s offering of loans pooled under Carvana’s prime shelf (CVRNA 2021-P1).
The weighted average FICO for CRVNA 2021-N1 was 571 on loans with a principal balance of $17,860 and a weighted average interest rate of 19.27%.
The transaction will include six tranches of notes, including a $185.4 million Class A tranche with preliminary AAA ratings from Kroll Bond Rating Agency, DBRS Morningstar and S&P Global Ratings.
According to the presale reports from the agencies, Carvana will use proceeds to pay down existing debt and to fund general corporate purposes.
The transaction is the eighth overall for Carvana (NYSE: CVNA), which was founded in 2012 as a subsidiary of DriveTime Automotive Group, but today operates independently with a shared-services agreement with its former parent. Carvana went public in 2017.
Kroll projects losses between 14.5%-16.5%, down from 16%-18% in the last Carvana last deal. DBRS Morningstar published a 17.5% cumulative net loss projection, while S&P Global’s expected loss is 20%-21%.
