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NEW YORK – (BUSINESS WIRE) – Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six categories of notes issued by Tricolor Auto Securitization Trust 2021-1 (“TAST 2021-1”), an ABS auto loan transaction at risk.
TAST 2021-1 will issue six ticket classes totaling approximately $ 234.2 million. The transaction includes a three-month pre-financing period which could represent up to 15% of the total receivables balance. The preliminary ratings reflect initial credit enhancement levels ranging from 50.00% for Class A Notes to 11.00% for Class F Notes.
This transaction represents the first ABS securitization rated in 2021 for Tricolor Auto Acceptance, LLC (“Tricolor” or the “Company”). Previously, the Company had issued one rated ABS securitization in November 2018 as well as five unrated securitizations from 2013 to 2020. Founded in 2007, Tricolor is an auto lender and “buy here, pay here” auto finance company that focuses on the underserved Hispanic market. Tricolor serves consumers who are generally unable to obtain financing from traditional lending sources such as credit unions, banks and captive auto finance companies. Company founder and CEO Daniel Chu owns 35.5% of the company, while the remaining 64.5% is held by high net worth individuals and family offices. The Company is an indirect wholly owned subsidiary of Tricolor Holdings, LLC. As of June 15, 2021, Tricolor operated a total of 47 dealerships, including 32 located in Texas, 10 in California and one in Nevada. The Texas and Nevada dealers operate under the Tricolor name and the California dealers operate under the Ganas Auto Group name, which is an affiliate brand of Tricolor. In addition, Tricolor operates seven Ganas Ya!
KBRA applied its global auto loan ABS rating methodology, as well as its global structured finance counterparty methodology and ESG global rating methodology as part of its analysis of the underlying collateral pool of the transaction, the proposed capital structure and data from Tricolor’s historical static pool. KBRA reviewed its operational review of Tricolor, which was conducted in September 2018, as well as periodic update calls with the Company. Operational agreements and legal opinions will be reviewed prior to closing.
Click here to view the report. To access the assessments and relevant documents, click here.
Further information on key credit considerations, sensitivity analyzes that examine the factors that may affect these credit ratings and how they might lead to an improvement or a downgrade, and ESG factors (when they are a factor). key to the change in credit rating or rating outlook) can be found in the full assessment report mentioned above.
A description of all substantially significant sources that were used to prepare the credit rating and information on the method (s) (including models and sensitivity analyzes of relevant key rating assumptions, if any) used to determine the Credit Ratings are available in the Information Disclosure Form (s) located here.
Here you will find information about the meaning of each rating category.
Further information relating to this rating measure is available in the information disclosure form (s) referenced above. Additional information regarding KBRA’s 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 United States Securities and Exchange Commission as NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a credit rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a credit rating agency with the UK Financial Conduct Authority under the temporary registration regime. In addition, KBRA is appointed as the designated rating agency by the Ontario Securities Commission for issuers of asset-backed securities to file a simplified prospectus or a shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.
William Carson, Senior Director (Senior Analyst)
+1 (646) 731-2405
Michael Pettigrew, Senior Analyst
+1 (646) 731-1208
Sandy Azer, Director
+1 (646) 731-1200
Eric Neglia, Senior Managing Director (Chairman of the Rating Committee)
+1 (646) 731-2456
Contact business development
Ted Burbage, Managing Director
+1 (646) 731-3325
Source: Kroll Bond Rating Agency