News Column

Kroll Bond Rating Agency Assigns Preliminary Ratings to First Investors Auto Owner Trust 2014-2

August 4, 2014

NEW YORK--(BUSINESS WIRE)-- Kroll Bond Rating Agency (“KBRA”) assigns preliminary ratings to four classes of First Investors Auto Owner Trust 2014-2 (“FIAOT 2014-2”), an auto loan ABS transaction.

FIAOT 2014-2 is collateralized by approximately $188.2 million of subprime auto loan receivables, as of June 30, 2014 and is expected to contain approximately $225 million of loans at closing. The preliminary ratings reflect the initial credit enhancement levels of 19.80% for the Class A notes, 15.15% for the Class B notes, 7.05% for the Class C notes and 1.50% for the Class D notes. Credit enhancement consists of overcollateralization, subordination of junior notes, cash reserves and excess spread. This transaction is First Investors’ second securitization of 2014 and its fourteenth securitization overall.

First Investors is an experienced and capable originator and servicer of subprime auto loans. The company was founded over 25 years ago and has benefitted from a stable and experienced management team, which has managed its business through several economic cycles. First Investors’ loan portfolio has performed well over the past several years in part due to its strong credit culture, tighter underwriting standards as well as stabilizing unemployment levels and a strong used car market.

KBRA applied its U.S. Auto Loan ABS methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and First Investors’ 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. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.

For complete details on the analysis, please KBRA’s Pre-Sale Report, First Investors Auto Owner Trust 2014-2 Pre-Sale Report, which was published today at www.kbra.com.

Preliminary Ratings Assigned: First Investors Auto Owner Trust 2014-2

Class                   Rating                   Expected Initial Principal Balance
A-1                   K1+(sf)                   $32,900,000
A-2                   AAA(sf)                   $90,000,000
A-3                   AAA(sf)                   $60,920,000
B                   AA(sf)                   $10,460,000
C                   A(sf)                   $18,230,000
D                   BBB(sf)                   $12,490,000


17g-7 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: First Investors Auto Owner Trust 2014-2 17g-7 Disclosure Report

Related Publications: (available at http://www.kbra.com/)

ABS: First Investors Auto Owner Trust 2014-2 Pre-Sale Report

ABS: First Investors Auto Owner Trust 2014-2 Peer Comparison

ABS: First Investors Auto Owner Trust 2014-2 17g-7 Disclosure Report

U.S. Auto Loan ABS Rating Methodology

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).



Analytical:

Kroll Bond Rating Agency

Rosemary Kelley, 646-731-2337

rkelley@kbra.com

or

William Carson, 646-731-2405

wcarson@kbra.com

or

Yuting Zhang, 646-731-2406

yzhang@kbra.com

or

Follow us on Twitter!

@KrollBondRating


Source: Kroll Bond Rating Agency


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