United Auto Credit Corporation (UACC) is getting ready to roll out a roughly $150-million securitization of subprime auto loans, according to presales from Kroll Bond Rating Agency and Standard & Poor’s.
UACST 2013-1 is now backed by roughly $118 million of subprime loans, but the deal is ramping up and the value of collateral is expected to reach nearly $160 million before closing, which is slated for May 23. The arrangers are RBS Securities and Wells Fargo Securities.
A 2.5-year A-2 tranche for $53 million is rated ‘AAA(sf)’ by both Kroll and S&P, while a one-year A-1 tranche for $38.6 million is rated ‘K1+(sf) and ‘A-1+ (sf)’, respectively.
The Class A notes have an initial credit enhancement level of 43.5%, which rises to 49.9%.
The weighted average FICO score of the borrowers that are in the pool so far is 553. This is lower than comparable sub-prime auto loans that have come out recently. But other metrics for the transaction were slightly better than recent comps.
This would be UACC’s second ABS since it was restructured in 2008, and its ninth securitization overall. The firm has originated and serviced subprime auto loans for over 16 years. Over the past four years, the firm has shifted from a “decentralized retail branch network of 144 locations to a centralized operating structure with a dedicated servicing and collection center,” Kroll said.