KBRA assigns preliminary ratings to five classes of notes issued by Carvana Auto Receivables Trust 2023-N3 (“CRVNA 2023-N3”), an auto loan ABS transaction. Initial credit enhancement levels for CRNVA 2023-N3 range from 53.25% for the Class A notes to 6.65% for the Class E notes. Initial credit enhancement consists of overcollateralization, subordination (except for the Class E notes) and a reserve account funded at closing.

CRVNA 2023-N3, represents the sixth term ABS securitization for the Company in 2023, the ninth under its near-prime shelf, and the twenty-fourth overall. CRVNA 2023-N3 will issue five classes of notes totaling approximately $282.6 million. The transaction is collateralized by $298.7 million of automobile loans to primarily near-prime obligors as defined by the Company.

Carvana was launched out of DriveTime Automotive Group Inc. (“DriveTime”) in 2012 as an eCommerce platform for buying used vehicles. Carvana, through its website (www.Carvana.com), offers a unique used vehicle buying experience that enables customers to purchase and finance vehicles online through an efficient and transparent process. Initially launched in Atlanta, Georgia, Carvana has expanded nationally and is now operating in over 300 markets. Carvana’s business and operations fully integrate all steps of the vehicle purchase process including vehicle acquisition, trade-in, financing, and delivery.

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 Carvana’s historical static pool data. KBRA considered its operational review of Carvana as well as periodic update 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. 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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