KBRA Assigns Preliminary Ratings to GLS Auto Select Receivables Trust 2023-1
KBRA assigns preliminary ratings to six classes of notes issued by GLS Auto Select Receivables Trust 2023-1 ("GSAR 2023-1"), a near prime auto loan ABS transaction.
GSAR 2023-1 represents the inaugural near prime only term ABS securitization for Global Lending Services LLC ("GLS" or the "Company"). The Company has also issued 23 securitizations, collateralized by mostly subprime auto loans, since its inaugural issuance in 2014. The Company began originating subprime loans in 2013 and near prime loans via the "Select Program" in October 2021. The "Select Program" is a distinct product offering separate from the Company's subprime originations. The collateral in GSAR 2023-1 is comprised of "Select Program" loans only.
GLS is an auto finance company founded in 2011 and is majority-owned by Assured Investment Management LLC ("Assured"), an alternative asset manager owned by funds managed by Assured Guaranty Ltd, an insurance company. Assured (formerly BlueMountain Capital Management) has invested $135 million since inception. Based on financials provided by the Company, GLS has been profitable since 2017. As of March 31, 2023, the Company reported positive unaudited year-to-date net income of approximately $36.7 million, had total assets of over $4.8 billion, total members' equity of $226.9 million, loss absorbing capital of approximately $448.4 million and an aggregate managed portfolio balance of $5.3 billion.
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 transaction's underlying collateral pool, the proposed capital structure, and GLS's historical static pool data. KBRA considered its operation review of GLS, as well as periodic due diligence calls with GLS. Operative agreements and legal opinions will be reviewed prior to closing.
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
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.
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. 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.
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