KBRA Assigns Preliminary Ratings to Flagship Credit Auto Trust 2022-2
KBRA assigns preliminary ratings to five classes of notes issued by Flagship Credit Auto Trust 2022-2 ("FCAT 2022-2"), an asset-backed securitization collateralized by a pool of auto loans.
FCAT 2022-2 will issue seven classes of notes totaling $500 million, collateralized by a pool of auto loan contracts originated on (1) an indirect basis mainly through franchise auto dealers and (2) a direct basis from online aggregators and other fulfillment partners. The transaction has initial hard credit enhancement levels of 34.80% for the Class A Notes through 2.65% for the Class E Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (except for the Class E Notes) and a reserve account funded at closing.
FCAT 2022-2 represents the second term ABS securitization in 2022 for FC HoldCo LLC. The underlying loans in the FCAT 2022-2 were originated by Flagship Credit Acceptance LLC ("Flagship" or the "Company") and CarFinance Capital LLC ("CarFinance") and are serviced by Flagship.
KBRA applied its Auto Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the static pool data and the underlying collateral pool and stressed the capital structure based upon its stress case cash flow assumptions. KBRA considered its operational review of Flagship, which was conducted at their Chadds Ford, PA headquarters, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
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