NEW YORK–(BUSINESS WIRE)–#KBRA–KBRA assigns preliminary ratings to six classes of notes issued by Tricolor Auto Securitization Trust 2023-1 (“TAST 2023-1”), a subprime auto loan ABS transaction.
TAST 2023-1 will issue six classes of notes totaling $223.97 million. TAST 2023-1 represents Tricolor Auto Acceptance, LLC’s (“Tricolor” or the “Company”) second ABS aligned with the 2021 Social Bond Principles administered by the International Capital Market Association (“ICMA”), as the Issuer intends to utilize the proceeds of the issuance for an eligible social project that provides or promotes access to essential services and/or socioeconomic advancement and empowerment.
This transaction represents the first rated ABS securitization in 2023 for the Company. Previously, the Company issued rated ABS securitizations in May 2022, July 2021 and November 2018 as well as five unrated securitizations from 2013-2020. 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 typically unable to obtain financing from traditional lending sources such as credit unions, banks, and captive auto finance companies. As of December 31, 2022, Tricolor operated a total of 52 dealerships with 33 located in Texas, 16 in California, two in Arizona, one in New Mexico and one in Nevada. The dealerships in Texas, Nevada, New Mexico, and Arizona operate as Tricolor and the dealerships in California operate as Ganas Auto Group, which is an affiliated brand of Tricolor. Nine of the dealerships operate under the sub-brand, Ganas Ya!.
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 Tricolor’s historical static pool data. KBRA considered its operational review of Tricolor, which was conducted in September 2018, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.
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Related Publications
- Auto Loan ABS Global Rating Methodology
- Global Structured Finance Counterparty Methodology
- ESG Global Rating Methodology
Disclosures
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.
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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 pursuant to the Temporary Registration Regime. 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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