KBRA Assigns Preliminary Ratings to CarNow Auto Receivables Trust 2021-1

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes issued by CarNow Auto Receivables Trust 2021-1 (“CNART 2021-1”), an auto loan ABS transaction.

CNART 2021-1 represents the first term ABS securitization in 2021 for Byrider Holding Corp. and its finance subsidiary Byrider Finance, LLC, dba CarNow Acceptance Company (collectively “Byrider” or “the Company”) and Byrider’s tenth securitization overall.

Byrider is a used vehicle retailer in the U.S. that focuses on both the sale and financing of vehicles to subprime borrowers whose FICO scores are 620 and below. The Company was founded in 1989 and was acquired by Altamont Capital Partners in May 2011. The Company’s business model consists of vehicle acquisition, reconditioning, sales, underwriting, financing, loan servicing and after-sale support. Byrider oversees a network of 142 stores, of which 31 are Company-owned and 111 are franchised. Byrider’s primary geographical focus is on the Midwest, Mid-Atlantic, and Southeast regions. Their target customer base is borrowers with subprime credit who generally have a credit bureau score ranging from 450 to 600. Many of the Company’s borrowers have experienced prior credit difficulties or have limited credit histories with credit bureaus. As of the initial cutoff date, the loans have weighted average FICO of 556, average current balance of $11,073, weighted average interest rate of 21.12% and weighted average original and remaining terms of 54 and 45 months, respectively.

KBRA applied its Auto Loan ABS Global Rating Methodology and Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Byrider’s historical static pool data. KBRA considered its operational review of Byrider, which was conducted at its Carmel, IN headquarters in 2019, as well as several business updates with the Company since that time. Operative agreements and legal opinions will be reviewed prior to closing.

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Related Publications

• Auto Loan ABS Global Rating Methodology
• Global Structured Finance Counterparty 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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