KBRA assigns preliminary ratings to five classes of notes issued by CarNow Auto Receivables Trust 2023-1 (“CNART 2023-1”), an asset-backed securitization collateralized by a pool of auto loans.

CNART 2023-1 will issue five classes of notes totaling $140.57 million, collateralized by a pool of retail automobile contracts made to subprime obligors that are secured by used automobiles. Byrider will use the net proceeds from the issuance of the notes to fund the reserve account and to repay existing debt. The transaction has initial hard credit enhancement levels of 74.25% for the Class A Notes through 23.25% for the Class E Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (except for the Class E Notes) and a reserve account funded at closing.

This transaction represents the first ABS securitization in 2023 for Byrider Holding Corp. and its finance subsidiary Byrider Finance, LLC, dba CarNow Acceptance Company (collectively “Byrider” or “the Company”) and Byrider’s thirteenth securitization overall.

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 portfolio pool data, underlying collateral pool and capital structure. KBRA considered its operational review of Byrider, as well as periodic due diligence calls with the Company. 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
• 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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