A Florida-based subprime lender is looking to price its first securitization, featuring loans issued to undocumented borrowers and those recently discharged from federal bankruptcy.
The $130.4 million Crédito Real USA Auto Receivables Trust 2021-1 is sponsored by Fort Lauderdale-based Crédito Real USA Finance, owned by Mexican consumer finance firm Crédito Real SAB de CV SOFOM since 2015. The firm was formerly known as AFS Acceptance, and has been underwriting second-look, subprime auto loans through non-franchised used auto dealers since 2007.
Crédito Real targets borrowers with little or no credit history as well as bad credit.
The debut deal includes three classes of notes, led by a $107.26 million Class A tranche with 30.75% credit enhancement and a preliminary single-A rating from Kroll Bond Rating Agency.
The notes are secured by loans with an average principal balance of $13,647, weighted-average non-zero FICO score of 558, a WA APR of 23.46% and original loan terms of 67 months. The loans, which make up most of the company’s $141 million managed portfolio, are seasoned an average of 14 months.
In the first-time pool, 66.3% of the borrowers were underwritten through the company’s “classic” subprime platform geared to buyers with little or no credit history. Another 19% of the loans are through is “Vamos” program that targets Latin American communities, including undocumented applicants who lack Social Security numbers but have tax identification numbers.
The remaining 10.2% are borrowers recently discharged from Chapter 7 or Chapter 13 federal bankruptcy.
Crédito Real operates in 29 states, partnering with 1,700 independent dealers. The company has generated positive net income since 2018.
