NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes issued by CPS Auto Receivables Trust 2018-B (“CPSART 2018-B”), an auto loan ABS transaction.
CPS Auto Receivables Trust 2018-B (“CPSART 2018-B”) will issue five classes of notes totaling $201.823 million that are collateralized by a trust certificate backed by a pool of fixed rate retail automobile contracts, made to subprime obligors and secured by new and used automobiles, light trucks, vans and minivans.
The preliminary ratings reflect the initial credit enhancement levels of 55.30% for the Class A notes, 39.20% for the Class B notes, 25.50% for the Class C notes, 13.45% for the Class D notes and 2.55% for the Class E notes. Credit enhancement for the notes consists of the reserve account, overcollateralization, excess interest on the receivables and subordination (except for the Class E notes.)
This transaction represents the second term ABS securitization in 2018 and the 29th since 2010 for Consumer Portfolio Services, Inc. (“CPS” or the “Company”). All of CPS securitizations prior to 2008 benefited from a bond insurance policy, for the senior-most class. The Company issued its first securitization in 1994 and 76 transactions in total that were supported by aggregate original collateral of approximately $12.3 billion. This is the fourth securitization that KBRA has rated for CPS.
KBRA applied its Global Auto Loan ABS methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and CPS’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.
Preliminary Ratings Assigned: CPS Auto Receivables Trust 2018-B
| Class | Preliminary Rating | Initial Principal Balance | ||||
| A | AAA (sf) | $93,685,000 | ||||
| B | AA (sf) | $33,005,000 | ||||
| C | A (sf) | $28,085,000 | ||||
| D | BBB (sf) | $24,703,000 | ||||
| E | BB- (sf) | $22,345,000 | ||||
Representations & Warranties Disclosure
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report available here.
Related Publications: (available at www.kbra.com)
- CPS Auto Receivables Trust 2018-B Pre-Sale Report
- CPS Auto Receivables Trust 2018-B Peer Comparison
- Global Auto Loan ABS Rating Methodology
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and 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.
