Lobel Automobile Receivables Trust will issue $223.8 million in asset-backed securities (ABS) secured by subprime automobile loan contracts that are financing used automobiles, light-duty trucks, minivans and sport-utility vehicles.
Lobel Financial is the deal's sponsor, which will issue the securitized bonds through six tranches of class A, B, C, D, E and F notes, according to Morningstar DBRS. The rating agency expected the transaction to close on April 29.
The rule 144A deal includes a 90-day prefunding period, funded with $39.3 million, or about 16% of the pool's aggregate initial balance, DBRS said. That balance is expected to be $242.8 million.
The rating agency added that at least $13.8 million of that amount is expected to represent receivables purchased from the Lobel Automobile Receivables Trust 2023-1 deal, it said.
Class A notes will issue the bulk of the series 2026-1 notes, selling $117.5 million, DBRS said.
Final scheduled payment dates include Oct. 16, 2028, April 16, 2029, Nov. 15, 2029, May 15, 2030, Jan. 15, 2031 and March 15, 2033 on classes A, B, C, D, E, and F, respectively.
The rating agency notes that initial hard credit enhancement ranges from 52.58% on the class A notes to 8.80% on the class F notes. The credit enhancement includes subordination, overcollateralization, a reserve account and excess spread provide credit enhancement to the notes.
Subordination varies from 43.78% on the class A notes to 6.19% on the class E notes, DBRS said, while finding that all the notes benefit from 7.80% in overcollateralization and a reserve account representing 1.00% of the outstanding notes.
The underlying collateral, extended to borrowers with a non-zero weighted average credit score of 608, is composed of 13,453 receivables with an average balance of $15,380.
The credit score comes off of a high of 616 on the Lobel 2025-1 securitized pool, and the leverage was a 112.12% loan-to-value (LTV) ratio. DBRS said.
DBRS assigns ratings ranging from (P) AAA (sf) on the class A notes to (P) B (low) (sf) on the class F tranche.
