Flagship Credit Acceptance is planning to sell a 144A auto ABS called Flagship Credit Auto Trust 2012-1.
According to a Kroll Bond Rating Agency (KBRA) presale report, the deal is backed by $115 million of subprime auto loan receivables.
KBRA stated that the offering has initial credit enhancement levels of 71% for the Class A notes, 23% for the Class B notes, 13% for the Class C notes and 7% for the Class D notes. The enhancement comprises overcollateralization, subordination of junior notes, cash reserves and excess spread.
FCA is an originator and servicer of subprime auto loans. The company and its predecessor, Flagship Credit Corp. have been originating and servicing subprime auto loans for over seven years. FCA is majority owned by Perella Weinberg Partners (PWP) managed funds, which bought Flagship in 2010. PWP intially contributed $50 million to FCA and FC Funding, and has since raised its investment to $80 million, the rating agency stated.
FC Funding buys loans from FCA once they are originated. PWP has expertise in ABS in general and the auto finance sector specifically and is further invested in the auto space through CarFinance Capital, which is a recently formed subprime auto finance company.