KBRA Assigns Preliminary Ratings to Veros Auto Receivables Trust 2020-1

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns ratings to four classes of Veros Auto Receivables Trust 2020-1 (“VEROS 2020-1”), an auto loan ABS transaction that is expected to close March 12, 2020.

VEROS 2020-1 will issue four classes of notes totaling $240.50 million. The notes are backed by a pledge of assets of the issuer and the underlying trust. The assets of the underlying trust will include a pool of fixed rate retail automobile contracts made to subprime obligors who generally have a credit bureau score ranging from 450 to 650, secured by used non-commercial automobiles.

VEROS 2020-1 includes a prefunding account that will be used to purchase additional receivables up to 8% of the initial cutoff date pool balance and expected balance of the subsequent receivables for up to 3 months after closing. The transaction has initial credit enhancement levels of 37.75% for the Class A Notes through 5.00% for the Class D Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (except for the Class D Notes) and a reserve account funded at closing.

KBRA applied its Global Auto Loan ABS methodology and its Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and ACA’s historical static pool data. KBRA also conducted an operational assessment on the originator and servicer, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.

To access ratings, reports and disclosures, click here.

Preliminary Ratings Assigned: Veros Auto Receivables Trust 2020-1

Class

Preliminary Ratings

Principal Balance

A

A (sf)

$159,300,000

B

BBB (sf)

$36,570,000

C

BB (sf)

$25,410,000

D

B (sf)

$19,220,000

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Analytical:
Eric Neglia, Managing Director

+1 (646) 731-2456

eneglia@kbra.com

Rahel Avigdor, Director

+1 (646) 731-1203

ravigdor@kbra.com

Michael Polvere, Senior Analyst

+1 (646) 731-3339

mpolvere@kbra.com

Business Development:
Ted Burbage, Managing Director

+1 (646) 731-3325

tburbage@kbra.com

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