Flagship Credit Acceptance is marketing its fourth subprime auto-loan securitization of the year, with a collateral pool that will have a high share of called collateral as well assets to be determined during a post-closing prefunding period.
According to ratings agency presale reports, Flagship will sell $303 million in bonds from a $314.8 million of loan originations by Flagship as well as its CarFinance.com subsidiary.
Approximately 14% of the loans in the identified pool are called collateral from a 2015 securitization by Flagship (the latest deal is Flagship’s 22ndterm asset-backed offering). In addition, the deal includes a $62.96 million prefunding account in which Flagship will originate and sell loans into the pool after the ABS deal prices.
The transaction includes a $203.2 million Class A tranche due April 2025 with preliminary AAA ratings from S&P Global Ratings and DBRS Morningstar.
S&P considers the deal slightly stronger from a credit quality perspective compared to Flagship’s most recent transaction (FCAT 2020-3). The weighted average loan-to-value ratio decreased to 120.4% from 123.3%, and increased seasoning to eight months from two months due to the inclusion of the older called collateral
The identified portfolio has 11,496 receivables from within Flagship’s $3.13 billion managed portfolio.
Over 78% of the loans are for used vehicles, with WA original terms of 70.07 months.
S&P’s expected loss range is 13.25%-13.75%.
Wells Fargo is the lead on the deal.
