KBRA Assigns Preliminary Ratings to CarNow Auto Receivables Trust 2017

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) announces the preliminary ratings to four classes of notes issued by CarNow Auto Receivables Trust 2017-1 (“CNART 2017-1”), a subprime auto asset-backed securities transaction.

CNART 2017-1 will issue $126.32 million of notes collateralized by approximately $159.2 million of subprime auto loan receivables. The transaction has initial credit enhancement levels ranging from 49.00% for the Class A notes to 29.00% for the Class C notes. The target enhancement levels for the Class A notes and Class C notes are 52.75% and 32.75%, respectively.

This transaction represents the first term ABS securitization in 2017 for J.D. Byrider and its finance subsidiary Byrider Finance, LLC, dba CarNow Acceptance Company and J.D. Byrider’s sixth securitization overall. Byrider Finance, LLC is the sponsor and servicer of the loans supporting the offered securities for this transaction.

J.D. Byrider has been in the Buy Here Pay Here auto finance business for over 25 years with experience buying, reconditioning and selling vehicles and originating and servicing auto loans to lower quality subprime obligors. J.D. Byrider focuses on providing reliable, needs based transportation and financing to its customers. The Company i) performs a rigorous inspection and reconditioning process on each vehicle, ii) offers no-haggle vehicle pricing with a 24 month/24,000 mile warranty iii) provides financing that fits the customer’s personal budget including bi-weekly or semi-monthly payment options to match the customer’s payday cycle and iv) focuses on customer service at each stage of the process. J.D. Byrider has a network of 166 stores, of which 27 are Company-owned and 139 are franchised as of December 31, 2016. The Company-owned stores are located predominantly in the mid-west, Indiana, Ohio, Pennsylvania, Kentucky and Tennessee.

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 J.D. Byrider’s historical static pool data. KBRA also conducted an operational assessment of the Company, 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.

For complete details on the analysis, please see KBRA’s pre-sale report, CarNow Auto Receivables Trust 2017-1, which was published today at www.kbra.com.

Preliminary Ratings Assigned: CarNow Auto Receivables Trust 2017-1

Class Rating Expected Initial Principal Balance
A A (sf) $91,470,000
B BBB (sf) $23,090,000
C BB (sf) $11,760,000

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.