Securitization

Despite a number of weaknesses, the bonds will benefit from a senior liquidity reserve account of $167.5 million and a subordinate liquidity reserve account of $20.5 million.

Most of the deals are FFELP loans, but the sponsor and servicer entity is considered a financially weak company.

However, capacity issues, the suspension of the government-sponsored enterprise purchase caps and higher conforming limits all could affect activity, KBRA said.

Moody’s steps in to provide a higher rating on the Class B portion of the COVID-hardened deal.

The deal’s sponsor has issued a small rated portion to investors and sold the remainder back to loan-originator.

The sponsors got the portfolio through multiple acquisitions from May through October.

The loan pool’s volatility score is high but its diversity of properties is a plus.

The sponsor’s Fortune 500 parent provides comfort in the face of the subprime-auto industry’s woes.

The sponsor’s strong track record mitigates risks, including “dirty current” loans and low FICO scores.

Robust salaries are a plus, but concentrating loans in a few well-paying fields presents different risks.

The auto-lease and nonprime-auto sectors are fueling what likely will be record volume.

Delinquencies fell in nearly every commercial-loan category, at trend anticipated to continue.

Sponsor mitigates aviation industry’s Covid woes with structural features including novel element.

Auto-related issuers seek funding as end to Libor and 2021 approach.

The deal carries relatively low leverage and high subordination.

Stronger collateral and less credit enhancement reflect lessening pandemic risk.

Moody’s: Rapidly evolving electronic-vehicle technology poses collateral risk also for traditional rental-car ABS.

One downgrade stemmed from a default, with three others warning of pending defaults.

Adjustments to Fitch’s CLO rating criteria place numerous deals under observation, but so far only rating upgrades have resulted.

Still relying on Libor, Brightwood SPV Advisors is approaching the market with its first collateralized loan obligation transaction of 2021, which is structured similarly to its last CLO priced in December 2020 and illustrates what a difference a year can make in terms of pricing.