KBRA Assigns Preliminary Ratings to Westlake Automobile Receivables Trust 2023-P1

KBRA assigns preliminary ratings to five classes of notes issued by Westlake Automobile Receivables Trust 2023-P1 (“WLAKE 2023-P1”), an asset-backed securitization collateralized by a pool of prime auto loans.

WLAKE 2023-P1 will issue five classes of notes totaling $185.307 million. The preliminary ratings reflect initial credit enhancement of 12.11% for the Class A-1 and Class A-2 notes, through 4.40% for the Class D notes. Credit enhancement will consist of subordination (except for the Class D notes), overcollateralization, a reserve account and excess spread.

This transaction represents the inaugural prime only term ABS securitization for Westlake Services, LLC (“Westlake” or the “Company”). While this transaction is their first prime only ABS securitization, the Company has issued 31 subprime auto loan ABS securitizations since May 2010. The Company began progressively increasing their originations to prime borrowers in January 2017 and views it as an integral part of becoming a full-credit spectrum lender for its dealers. As of April 30, 2023, Westlake’s managed portfolio consists of over $2.4 billion prime receivables (16%) and 12.5 billion (84%) subprime receivables. The Company originates prime auto loans using the same network and channels as its subprime business. All loans are underwritten and serviced under the same policies and procedures.

KBRA applied its Auto Loan ABS Global Methodology as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the portfolio pool data, underlying collateral pool, and capital structure. KBRA considered its operational reviews of Westlake, as well as periodic due diligence calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.

To access ratings and relevant documents, click here.

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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.

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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