DBRS Assigns Provisional Ratings to Westlake Automobile Receivables Trust 2017-2

DBRS, Inc. (DBRS) has today assigned provisional ratings to the following classes of notes issued by Westlake Automobile Receivables Trust 2017-2:

-- $187,300,000 Class A-1 at R-1 (high) (sf)
-- Class A-2-A at AAA (sf) *
-- Class A-2-B at AAA (sf) *
-- $65,480,000 Class B at AA (sf)
-- $86,560,000 Class C at A (sf)
-- $71,510,000 Class D at BBB (sf)
-- $36,130,000 Class E at BB (sf)

• The combination of Classes A-2-A and A-2-B is expected to equal $253.02 million.

The provisional ratings are based on DBRS’s review of the following analytical considerations:

-- Transaction capital structure, proposed ratings and form and sufficiency of available credit enhancement.
-- The ability of the transaction to withstand stressed cash flow assumptions and repay investors according to the terms under which they have invested. For this transaction, the rating addresses the timely payment of interest on a monthly basis and principal by the legal final maturity date for each class.
-- The credit quality of the collateral and performance of the auto loan portfolio by origination channels.
-- The capabilities of Westlake Services, LLC (Westlake) with regards to originations, underwriting and servicing.
-- The quality and consistency of provided historical static pool data for Westlake originations and performance of the Westlake auto loan portfolio.
-- Wells Fargo Bank, N.A. (rated AA (high) (Negative)/R-1 (high) (Stable) by DBRS) has served as a backup servicer for Westlake since 2003, when a conduit facility was put in place.
-- The legal structure and presence of legal opinions that will address the true sale of the assets to the Issuer, the non-consolidation of the special-purpose vehicle with Westlake, that the trust has a valid first-priority security interest in the assets and the consistency with the DBRS “Legal Criteria for U.S. Structured Finance” methodology.

The collateral securing the notes consists entirely of a pool of retail automobile contracts secured by predominantly used vehicles that typically have high mileage. The loans are primarily made to obligors who are categorized as subprime, largely because of their credit history and credit scores.

The ratings on the Class A Notes reflect the 42.50% of initial hard credit enhancement provided by the subordinated notes in the pool, the Reserve Account (1.00%) and overcollateralization (7.00%). The ratings on the Class B, Class C, Class D and Class E Notes reflect 33.80%, 22.30%, 12.80% and 8.00% of initial hard credit enhancement, respectively. Additional credit support may be provided from excess spread available in the structure.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is Rating U.S. Retail Auto Loan Securitizations, which can be found on dbrs.com under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

Please see the attached appendix for additional information regarding sensitivity of assumptions used in the rating process.

The full report providing additional analytical detail is available by clicking on the link under Related Research at the right of the screen or by contacting us at info@dbrs.com.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.