Carvana markets bonds under second subprime automotive ABS deal of 2021
Online auto retailer Carvana (NYSE: CVNA) plans to sell $ 400 million in senior and subordinated bonds backed by a pool of unsecured auto loans from the company.
Carvana, based in Tempe, Ariz. top notch guarantee.
Carvana Auto Receivables Trust 2021-N2 is the third global auto lender / retailer-sponsored agreement to include a pool of exclusively non-senior loans. This is Carvana’s ninth securitization since 2019, which includes two prime loan ABS contracts on a separate shelf.
The offering consists of two senior tranches: $ 143 million of Class A-1 notes and $ 42.4 million of Class A-2 bonds, each with terms of seven years. Each of them carry preliminary AAA ratings from S&P Global and DBRS Morningstar.
The notes are backed by a 54.9% credit boost, similar to Carvana’s first subprime ABS deal for 2021.
Also offered is $ 53.6 million in Class B Notes with a double A rating; $ 58.2 million in Class C notes (rated A) and a Class D triple B tranche of $ 40.8 million. The unrated Class E notes totaling $ 62 million will either be held by the Carvana Trust or issued through private placements, according to reports from rating agencies.
The transaction is the eighth overall for Carvana, which was founded in 2012 as a subsidiary of DriveTime Automotive Group, but now operates independently with a shared services agreement with its former parent company. Carvana went public in 2017.
Carvana directly finances about 75-80% of all its used car sales.
Carvana has 291 branches across the country.