Auto ABS

Moody's took note of several credit strengths in the portfolio, including that on a weighted average (WA) basis, the contracts have a weighted average FICO score of 767 and only a point higher for the upsized pool.

Used cars make up virtually American Credit Acceptance entire collateral pool, and while observers said recoveries in this asset group have been lower, the pool includes a higher percentage of better performing called collateral.

Known for subprime financing, the sponsor has been making inroads lending to near-prime customers in the last couple of years.

Spreads ranging from 16-18 basis points over the three-month, interpolated yield curve on the P1 (Moody's) and F1+ (Fitch) notes, to 160 to 170 over the benchmark on the class D notes.

Lendbuzz sells the notes as it juggles mixed performance results from 2023. Originations and revenues saw huge jumps, but so did operating expenses.

The bank is a top auto lender, with a managed portfolio of $7.1 million through December 2023, and has a strong servicing track record.

The current levels of credit enhancement are a reduction from levels of 58.0%, 48.7%, 35.9%, 22.5% and 17% on the classes A, B, C, D and E on the BLAST 2024-1 deal.

A pool of open-end vehicle fleet lease and loan contracts for cars, trucks and other vehicles provide the revenues to the bonds.

Aside from overcollateralization and subordination, the notes get support from a reserve account representing 0.96% of the pool and an incremental reserve account maintain 1.00%.

Series 2024-2 can be upsized to $1.5 billion from the base pool amount, but regardless of the increase, pricing guidance, total credit enhancements and legal final maturities are expected to remain the same.