United Auto Credit Corporation plans to issue $175.6 million in securities backed by subprime auto loans.
The series 2014-1 transaction will offer six tranches of notes rated by DBRS. The $52.3 million, money market fund, class A-1 notes are rated R-1’. The $40.7 million, class A-2 notes are AAA’. The capital structure will also offer $25 million of A’-rated class B notes; $24 million of A’-rated class C notes; $14.6 million of BBB’-rated class D notes and $19 million of BB’-rated class E notes.
Initial credit enhancement on the class A notes will be at 52.23%; the class B notes have enhancement of 38.85%; the class C notes have enhancement of 26.01%; the class D have enhancement of 18.17%; and the class E notes have enhancement of 8.00%.
The class A-1 notes are due August 2015, the class A-2 notes are due June 2016, the class B notes are due Nov. 2016 and the class E notes are due July 2020. The class C and D notes are due July 2020.
UACST 2014-1 is the issuer’s third securitization following a change in management, a significant reorganization and a change in ownership.
Headquartered in Newport Beach, California, UACC, the sponsor and servicer, is a specialty finance company that has been engaged in the subprime automobile finance business since 1996. UACC purchases motor vehicle retail installment sales contracts from franchise and independent automobile dealerships throughout the U.S. UACC is a direct wholly-owned subsidiary of United PanAm Financial Corp. (UPFC).
From July 2008 to May 2010, UACC transformed its business strategy to a centralized operating structure from a decentralized retail branch network. In September 2008, UACC stopped originating new loans. UACC resumed originating loans via its new centralized operation in June 2009.
In the first quarter of 2011, UPFC was acquired by an entity controlled by Guillermo Bron, Chairman of the Board of Directors of UPFC, and by affiliates of Pine Brook Road Partners (Pine Brook), a private equity firm and company management.