Auto ABS

Lendbuzz appears to be on the upswing, according to KBRA. On a year-to-year basis ending in Q2 2023, originations grew 37.6%, and revenues were up 94.6% from a year ago.

The newest deal from the program could be upsized to $1.6 billion from $1.1 billion, with the structure and pool characteristics remaining the same.

The deal will be secured by payments on subprime auto loans and comes shortly after officer Jill Rockwood joined as chief financial officer.

Classes A, B, C and D have hard credit enhancement levels of 5.30%, 3.80%, 2.30% and 0.85%, respectively, higher than that of the CHAOT 2022-A.

The OCCU 2023-1 transaction will come to market as a 144a transaction, with higher levels of credit enhancement from yield supplement overcollateralization, initial hard credit enhancement and excess spread.

Subordination increased for the class A and class C notes, to 7.04% and 2.10%, respectively, from 7.00% and 1.50%. Meanwhile subordination decreased on the class B notes to 3.80%, from 4.25%.

The transaction's credit enhancement levels are lower than what was seen on the 2023-A pool, but is still strong, and is still high compared with peer transactions.

Rating agencies say the A, B, C and D notes have about 29.0%, 23.8%, 17.3% and 14.0% in credit enhancement, respectively, while A, B, and C notes enjoy a 15.9%, 10.6% and 4.0% in subordination.

Companies with public ratings from a national recognized rating agency make up 66.9% of the obligors in the pool, and those with an investment-grade rating represent 34.9% of the pool.

Notes will repay principal to investors sequentially. All junior notes will be shut out from receiving any principal payments until the immediate senior notes are paid.