KBRA Assigns Preliminary Ratings to American Credit Acceptance Receivables Trust 2023-2

KBRA assigns preliminary ratings to four classes of notes issued by American Credit Acceptance Receivables Trust 2023-2 (“ACAR 2023-2”), a $334.79 million auto loan ABS transaction with KBRA rating the Class A, Class B, Class C and Class D notes totaling $298.39 million.

ACAR 2023-2 is collateralized by a pool of retail automobile contracts, made to subprime obligors, and secured by new and used automobiles and motorcycles. The preliminary ratings reflect initial credit enhancement of 63.90% for the Class A notes through 17.30% for the Class E notes. Credit enhancement will consist of overcollateralization, subordination of the junior note classes (except for the Class E notes), a cash reserve account, and excess spread.

This transaction represents the second ABS securitization in 2023 for American Credit Acceptance, LLC (“ACA” or the “Company”). The Company issued its first securitization in October 2011 and since then has issued 41 additional transactions in the total amount of approximately $12.1 billion.

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 ACA’s historical static pool data. KBRA also conducted an operational assessment on the originator and servicer, as well as a review of the transaction’s legal structure and transaction documents. Operative agreements and legal opinions will be reviewed prior to closing.

To access ratings and relevant documents, click here.

Click here to view the report.

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.

About KBRA

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. 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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