Arivo Acceptance Auto Loan Receivables Trust 2019-1: Rating Report

DBRS, Inc. (DBRS Morningstar) finalized its provisional ratings on Arivo Acceptance Auto Loan Receivables Trust 2019-1 (ARIVO 2019-1 or the Trust). ARIVO 2019-1 represents the inaugural securitization of Arivo Acceptance, LLC (Arivo or the Company), a specialty finance company headquartered in Sandy, Utah. This transaction is structured as a Rule 144A transaction offering three classes of notes (collectively, the Notes): Class A, Class B and Class C. Initial Class A credit enhancement of 16.25% includes a reserve account (1.00% of the initial pool balance, funded at inception and non declining); overcollateralization (OC) of 0.75%; and subordination of 14.50% of the initial pool balance. Initial Class B enhancement of 5.40% includes a 1.00% reserve account, OC of 0.75% and 3.65% subordination. Initial Class C enhancement of 1.75% includes OC of 0.75% and a reserve account of 1.00%. OC will build to a target of 14.00% of the pool balance, based on excess spread available in the structure, and is subject to a floor of 1.00% of the initial pool balance. The receivables securitized in ARIVO 2019-1 are subprime auto loan contracts secured by new and used automobiles, light-duty trucks and vans.