CORRECTING and REPLACING KBRA Assigns Preliminary Ratings to FHF Trust 2020-1

In the fifth paragraph of release it should read: FHF’s historical static pool data (instead of Byrider’s historical static pool data).

The corrected release reads:

KBRA ASSIGNS PRELIMINARY RATINGS TO FHF TRUST 2020-1

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by FHF Trust 2020-1 (“FHF 2020-1” or the “Issuer”), a subprime auto loan asset-backed securities transaction.

The impact of COVID-19 has resulted in an economic slowdown and high unemployment, which is expected to adversely impact the performance of auto loans, including those supporting the subject transaction. Owing to this risk, KBRA increased its base case default assumptions for the subject pool in a manner that was consistent with a recent portfolio review of the sector detailed in the following report: U.S. Auto Loan and Auto Lease ABS Securities on Watch Report in addition to assuming a lower recovery rate on defaulted loans.

FHF 2020-1 represents the first rated term ABS securitization for the First Help Financial, LLC (“FHF” or the “Company”). FHF 2020-1 will issue three classes of notes totaling $143.24 million that are collateralized by a pool of retail automobile contracts, made to subprime obligors and secured by new (77%) and used (23%) automobiles and trucks. The transaction is expected to be collateralized by approximately $149.99 million of fixed rate installment loans, made to subprime borrowers. The ratings reflect initial credit enhancement levels ranging from 30.00% for the Class A notes to 6.50% for the Class C notes.

FHF is a subprime auto finance company with headquarters in Newton, Massachusetts and a satellite office in Phoenix Arizona. FHF was founded in 2006 and currently offers loans in 20 states. FHF is an indirect auto lender and purchases receivables from franchise and independent dealers. FHF serves consumers who are typically unable to obtain financing from traditional lending sources such as credit unions, banks, and captive auto finance companies.

KBRA applied its Global Auto Loan ABS Methodology and its Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and FHF’s historical static pool data. KBRA also conducted an operational assessment of the Company, 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.

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

Related Publications

• FHF 2020-1 KCAT
• Global Structured Finance Counterparty Methodology
• Global Auto Loan ABS 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 U.S. Information Disclosure Form 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 U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. 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 and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA.

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