KBRA Assigns Preliminary Ratings to First Investors Auto Owner Trust 2021-2

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes issued by First Investors Auto Owner Trust 2021-2 (“FIAOT 2021-2”), an asset-backed securitization collateralized by a pool of auto loans.

FIAOT 2021-2 will issue five classes of notes totaling $325 million that are collateralized by backed by a pool of fixed rate retail automobile contracts, which are made to subprime obligors who generally have a credit bureau score ranging from 500 to 650 and are secured by new and used non-commercial automobiles. Credit enhancement consists of excess spread, overcollateralization, subordination (except for the Class E Notes) and a reserve account funded at closing.

FIAOT 2021-2 represents the second ABS securitization in 2021 for First Investors Financial Services, Inc.’s (“First Investors” or “the Company”) and its 29^th securitization since 2002. This transaction includes a prefunding account that will be used to purchase additional receivables up to the sum of 20% of the closing date pool balance plus the expected balance of the subsequent receivables purchased for up to 3 months after closing.

First Investors was founded in 1988 and originates subprime auto loans via the following three channels: (1) the Indirect Program, through franchise auto dealers, (2) the Direct Program, through direct marketing to consumers who wish to refinance existing auto loans obtained from another lender and (3) the Alliance Program, through nine alliance partners. The Company also purchases loan portfolios and provides third party loan servicing.

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 First Investor’s historical static pool data. KBRA considered its operational review of First Investors, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.

Click here to view the report. To access ratings and relevant documents, click here.

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 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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