Kroll Bond Rating Agency (KBRA) is seeking public comment on its auto loan ABS rating methodology. The report, which was released today, offers detailed insight into KBRA's rating methodology of prime and subprime U.S. auto loan ABS. 

Comments should be submitted to abs-auto-comments@krollbondratings.com on or before Dec. 19. Following the review and evaluation of all submissions, the rating firm will publish a final version of its auto methodology report.

Although KBRA has not rated an auto deal as of yet, it has been looking at a few. The firm's auto rating methodology follows the release of its RMBS version on Aug 1. 

The agency also rolled out a CMBS report  in mid June. It has already rated five CMBS deals thus far and is engaged on two additional transactions in the sector. 

Meanwhile, the firm will be releasing its rental car methodology over the next few weeks and this will be followed by releases for the equipment and timeshare sectors.

KBRA’s rating of an auto loan ABS deal addresses the quality and expected performance of the underlying collateral. 

It also looks at the originator and servicer’s business model and operational strength as well as the deal terms, including the offering's capital structure, credit enhancement, and legal structure.

Its approach focuses on prevailing industry and credit trends, the integration of originator and servicer evaluations with the deal analysis as well as timely post-issuance surveillance of pool performance, servicer operations and market conditions.

"With this auto loan methodology, we continue to provide complete transparency into our methodologies and processes which present market participants with our strong analytical approach and reliable ratings followed by robust surveillance”, said James Nadler, KBRA president.

 

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