A pool of subprime and prime auto loan receivables will serve as collateral for $261.9 million in asset-backed securities form the Lendbuzz Securitization Trust, series 2025-1.
The trust will issue four classes of notes, A1, A2, B and C, which have legal final maturity dates of Feb. 16, 2026; Oct. 15, 2030; Nov. 15, 2030 and Jan. 15, 2032, according to Kroll Bond Rating Agency.
The pool—of new and used automobiles—should have a collateral balance of $275 million after its one-month pre-funding period, KBRA said.
Fixed-rate Notes will be repaid through a sequential pay structure that will require principal to be repaid in full to the class A1 notes. Once that is done, the class B notes become the priority, followed by class C. The class A1 and A2 notes will receive interest payments on a pro rata basis.
Aside from the subordination in the repayment sequence, Lendbuzz 2025-1's notes benefit from credit enhancement in the form of overcollateralization, subordination, a cash reserve account funding at closing and excess spread. The overcollateralization, initially 4.75%, will build to a target of 9.7%, and is subject to a floor of 0.50% of the target receivables balance.
At closing, which is expected by January 22, the cash reserve account will be funded in an amount equaling 1.0% of the initial pool balance. Excess spread will equal 7.06% of the pool balance, KBRA said.
In the collateral pool, the contracts have a weighted average (WA) non-zero FICO score of 687, with a WA average loan-to-value rate of 102.9%. These metrics had shifted noticeably from the Lendbuzz 2024-3 transaction, where the WA FICO score is 695, and the WA LTV is 101.9%. In both cases, used vehicles made up a large majority of the pool, accounting for 84.9% on the 2025-1 series, down from 86.1% in the 2024-3 series.
KBRA assigns K1+ to the A1 notes; and AAA, AA- and A- to the A2, B and C notes.
S&P Global Ratings assigns AA and A to the A2 and B notes, respectively.
