KBRA Assigns Preliminary Ratings to Westlake Automobile Receivables Trust 2025-2

Strategic Insights -

Kroll Bond Rating Agency (KBRA) has assigned preliminary ratings to eight classes of notes issued by Westlake Automobile Receivables Trust 2025-2 (WLAKE 2025-2), an asset-backed securitization collateralized by a pool of auto loans. The ratings reflect initial credit enhancement of 41.25% for the Class A-1, Class A-2, and Class A-3 notes, through 9.30% for the Class E notes. This transaction represents the third term ABS securitization in 2025 for Westlake Services, LLC, which has issued 37 subprime and one prime auto loan ABS securitizations since May 2010. The majority of Westlake's borrowers have experienced prior credit difficulties and generally have credit bureau scores ranging from 500 to 700.

Key Takeaways:

  • KBRA assigned preliminary ratings to eight classes of notes totaling $1.3 billion issued by WLAKE 2025-2, an asset-backed securitization collateralized by auto loans.
  • The ratings reflect initial credit enhancement of 41.25% for the Class A-1, Class A-2, and Class A-3 notes, and 9.30% for the Class E notes.
  • Westlake Services, LLC has issued 37 subprime and one prime auto loan ABS securitizations since May 2010, with the majority of borrowers having prior credit difficulties and credit bureau scores ranging from 500 to 700.
  • Loans are originated through independent and franchise dealers and segmented into three credit tiers (Standard, Gold, and Platinum) based on a borrower's credit bureau score.
  • Westlake utilizes a proprietary model to calculate a customer factor for each loan.
  • KBRA applied its Auto Loan ABS Global Methodology, Global Structured Finance Counterparty Methodology, and ESG Global Rating Methodology in its analysis of the portfolio pool data, underlying collateral pool, and capital structure.
  • Operative agreements and legal opinions will be reviewed prior to closing.

Statistics:

  • Total note issuance: $1.3 billion
  • Initial credit enhancement for Class A-1, Class A-2, and Class A-3 notes: 41.25%
  • Initial credit enhancement for Class E notes: 9.30%
  • Number of subprime ABS securitizations issued by Westlake Services, LLC since May 2010: 37
  • Number of prime ABS securitizations issued by Westlake Services, LLC: 1
  • Total number of ABS securitizations issued by Westlake Services, LLC: 38

Sources:

  • Kroll Bond Rating Agency, LLC (KBRA) news release, issued [no date provided]