August 08 2016 | Chadds Ford, PA
Flagship Credit Acceptance issued its third securitization for the year — backed by $400 million of subprime auto loans — this time with top notes receiving a AAA rating, according to S&P Global. Previously, the highest S&P had rated Flagship’s top notes was AA, the agency said in a presale report released Friday.
Among other strengths S&P took into account, Flagship completed the integration of two business platforms — its namesake platform with CarFinance Capital — without disruption to servicing and while maintaining consistent performance on the Flagship Credit Auto Trust (FCAT) indirect portfolio.
Flagship has also completed 15 securitizations (10 under the Flagship name and five under CarFinance), the oldest of which has reached a 12% pool factor — meaning that 12% of the original principal has yet to be repaid — and is performing better than its initial expectations, S&P said in the report.
“Taken as a whole, we believe the strengths noted above outweigh the concerns at this time and, in our assessment, we can now assign a rating as high as ‘AAA’ to FCAT transactions, where we had previously capped them at ‘AA’,” S&P said.
Loans in the 2016-3 trust have a weighted average Fico of 597, a weighted average original term of 70.6 months, and weighted average LTV of 119.1% — all relatively unchanged from the previous trust.
As of June 30, the managed portfolio grew 40% year over year, to $3.01 billion, while delinquencies fell to 7.54%, from 8.01% at yearend 2015. By comparison, though, delinquencies were 6.84% at midyear 2014. Annualized net losses through June were 4.29%, up from 3.64% in the year prior. “As per management, the higher delinquencies and losses were driven by the increasing weighted average seasoning of the overall portfolio and deterioration in CarFinance indirect originations, which the company has ceased originatingas of the end of January,” S&P said.
At midyear, Flagship and CarFinance had 858 employees and originated auto loans in 49 states through 9,700 mostly franchise dealerships.
As featured in Auto Finance News, authored by Larissa Padden.
Flagship Credit Acceptance LLC ("Flagship"), headquartered in Chadds Ford, Pennsylvania with offices in Irving, Texas, Phoenix, Arizona, Irvine, California and Indianapolis, Indiana, helps credit-challenged auto shoppers secure financing through partnerships with primarily franchised auto dealers and through its direct lending site, CarFinance.com. Flagship Credit has successfully grown its portfolio to $2.9 billion in managed receivables. The Company currently purchases indirect auto contracts from a nationwide network of over 9,400 dealers and originates direct to consumers in 46 states.
Headquartered on the West Coast of California, CarFinance Capital initiated operations in 2011 with an equity investment from affiliates of Perella Weinberg Partners. The company has a managed portfolio of approximately $897 million, which includes a mix of dealer indirect contracts and direct-to-consumer new purchases and refinanced loans. The company currently purchases indirect auto contracts from a network of over 3,200 dealers in 24 states and originates direct to consumer loans in 41 states.
To learn more about the company as a whole, please visit: http://carfinancecapital.com
Flagship Credit Acceptance, LLC ("Flagship") is committed to maintaining a culture of fair credit throughout the organization. In this regard, Flagship has developed a Fair Credit Program ("Program") that complies with all applicable fair credit laws and regulations ("FC Laws") and reflects industry best practices. Flagship is committed to comply with the letter and spirit of FC Laws. The goal of the Program is to carry out Flagship's commitment and be recognized internally and externally (e.g., by management, associates, customers, service providers, and the public) as dedicated to fair credit principles and demanding of compliance. The Program applies to all aspects of Flagship's operations (including reviewing, purchasing and servicing retail installment sale contracts whether for itself or others) and all services offered by Flagship, and across all of Flagship's credit operations, including marketing, underwriting, origination, processing, servicing, collection, loss mitigation, and payoff activities, and to all personnel who work for or on behalf of Flagship, whether as associates, officers, members of the Board of Directors, agents, representatives or service providers.
Should you have any questions about the details of any of Flagship's policies, please contact us at 1.800.900.5150 M-F, between 9:00 a.m. and 5:00 p.m. EST.×
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