KBRA assigns preliminary ratings to Carvana Auto Receivables Trust 2021-N3
NEW YORK–(COMMERCIAL THREAD) – Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to seven categories of notes issued by Carvana Auto Receivables Trust 2021-N3 (“CRVNA 2021-N3”), an ABS auto loan transaction.
CRVNA 2021-N3 represents the fifth ABS securitization for Carvana, LLC (“Carvana” or the “Company”) in 2021, the fourth under its non-prime shelf and the eleventh overall. CRVNA 2021-N3 will issue seven classes of notes totaling $ 438.9 million. The transaction is secured by approximately $ 420 million in auto loans made primarily to non-privileged debtors as defined by the Company.
Carvana was launched by DriveTime Automotive Group Inc. (“DriveTime”) in 2012 as an e-commerce platform for purchasing used vehicles. Carvana, via its website (www.Carvana.com), provides a unique pre-owned vehicle shopping experience that enables customers to purchase and finance vehicles online through an efficient and transparent process. Originally launched in Atlanta, Georgia, Carvana has expanded nationwide and now operates in 301 markets. Carvana’s business and operations fully integrate all stages of the vehicle purchasing process, including vehicle acquisition, trade-in, financing and delivery.
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 Carvana’s historical static pool, as well as static data available on pool losses for comparable auto loan originators. KBRA reviewed its operational review of Carvana, which was conducted at its Tempe, AZ headquarters, in February 2019, as well as periodic update calls with the company. Operational agreements and legal opinions will be reviewed prior to closing.
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 upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned above.
A description of all substantially significant sources that were used to prepare the credit rating and information about the method (s) (including significant models and sensitivity analyzes of the relevant key rating assumptions, if any) used to determine 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 information relating to this rating measure is available in the information disclosure form (s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures can be found 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.