DBRS Assigns Provisional Ratings to CIG Auto Receivables Trust 2019-1

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes to be issued by CIG Auto Receivables Trust 2019-1 (CIGAR 2019-1 or the Issuer):

-- $120,590,000 Class A Notes at AA (sf)
-- $20,670,000 Class B Notes at A (sf)
-- $10,340,000 Class C Notes at BBB (sf)
-- $10,330,000 Class D Notes at BB (sf)

The ratings are based on a review by DBRS of the following analytical considerations:

-- Transaction capital structure, proposed ratings and form and sufficiency of available credit enhancement.
-- Credit enhancement is in the form of overcollateralization, subordination, amounts held in the reserve fund and excess spread. Credit enhancement levels are sufficient to support the DBRS-projected expected cumulative net loss assumption under various stress scenarios.
-- 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 ratings address the timely payment of interest on a monthly basis and payment of principal by the legal final maturity date.
-- The capabilities of CIG Financial, LLC (CIG) with regard to originations, underwriting and servicing.
-- The CIG senior management team has considerable experience and a successful track record within the auto finance industry, having managed the company through multiple economic cycles.
-- The quality and consistency of provided historical static pool data for CIG originations and performance of the CIG auto loan portfolio.
-- The legal structure and presence of legal opinions that address the true sale of the assets to the Issuer, the non-consolidation of the special-purpose vehicle with CIG, that the trust has a valid first-priority security interest in the assets and the consistency with DBRS’s “Legal Criteria for U.S. Structured Finance” methodology.

The CIGAR 2019-1 transaction represents the second public term securitization of subprime auto loans and will offer both senior and subordinate rated securities. The receivables securitized in CIGAR 2019-1 will be subprime automobile loan contracts secured primarily by used automobiles, light-duty trucks, minivans and sport-utility vehicles.

The rating on the Class A Notes reflects the 31.50% of initial hard credit enhancement provided by the subordinated notes in the pool (24.00%), the Reserve Account (1.50%) and overcollateralization (6.00%). The ratings on the Class B, Class C and Class D Notes reflect 19.50%, 13.50% and 7.50% 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 & Criteria.

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

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

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

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