KBRA assigns preliminary ratings to four categories of notes issued by Veros Auto Receivables Trust 2022-1 (“VEROS 2022-1”), an auto loan ABS transaction.
This transaction represents Veros Credit LLC (“Veros” or the “Company”) first ABS securitization of 2022 and fifth overall. VEROS 2022-1 will issue four categories of notes totaling $184.38 million. The Notes are secured by a set of automobile loan agreements issued on an indirect basis primarily through independent automobile dealerships. VEROS 2022-1 includes a three-month pre-funding feature that will allow the purchase of additional receivables up to 11.5% of closing plus the pre-funded collateral pool.
Veros is a private, California-based indirect automotive finance company. The company was founded in 1998 as Credit One Corporation and renamed Veros Credit LLC in 2010. Based on financial data provided by the company, Veros has been profitable since inception. As of February 28, 2022, Veros operates in 22 states, has a loan portfolio with a total outstanding balance of $464.9 million.
KBRA applied its global ABS rating methodology for auto loans as well as its global structured financial counterparty methodology and its global ESG rating methodology as part of its analysis of the transaction’s underlying collateral pool, capital structure proposed and historical data from the Veros static pool. KBRA reviewed its review of Veros operations, as well as periodic due diligence calls with Veros. Operational agreements and legal opinions will be reviewed prior to closing.
Further information on key credit considerations, sensitivity analyzes that consider factors that may affect these credit ratings and how they could 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 on the methodology(ies) (including all significant models and sensitivity analyzes of the main relevant rating assumptions, the where applicable) used to determine the credit rating are available in the information disclosure form(s) located here.
Information on the meaning of each rating category can be found here.
Additional information relating to this rating metric is available in the information disclosure form(s) referenced above. Additional information regarding KBRA’s policies, methodologies, grading scales and disclosures is available at www.kbra.com.
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