DBRS Morningstar Finalizes Provisional Ratings on Westlake Automobile Receivables Trust 2019-3

DBRS, Inc. (DBRS Morningstar) finalized its provisional ratings on the following classes of notes (the Notes) issued by Westlake Automobile Receivables Trust 2019-3 (Westlake 2019-3 or the Issuer):

-- $277,500,000 Class A-1 Notes at R-1 (high) (sf)
-- $492,600,000 Class A-2 Notes at AAA (sf)*
-- $115,490,000 Class B Notes at AA (sf)
-- $150,460,000 Class C Notes at A (sf)
-- $134,620,000 Class D Notes at BBB (sf)
-- $58,730,000 Class E Notes at BB (sf)
-- $70,600,000 Class F Notes at B (sf)

*DBRS Morningstar discontinued its provisional rating on the Class A-2-B Notes and renamed the Class A-2-A Notes to the Class A-2 Notes.

The ratings are based on a review by DBRS Morningstar 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 ratings address 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 channel.
-- The capabilities of Westlake Services, LLC (Westlake) with regard 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/R-1 (high) with Stable trends by DBRS Morningstar) has served as a backup servicer for Westlake since 2003, when a conduit facility was put in place.
-- Westlake 2019-3 provides for Class F Notes with an assigned rating of B (sf). While the DBRS Morningstar “Rating U.S. Retail Auto Loan Securitizations” methodology does not set forth a range of multiples for this asset class for the B (sf) level, the analytical approach for this rating level is consistent with that contemplated in the methodology. The typical range of multiples applied in the DBRS Morningstar stress analysis for a B (sf) rating is 1.00 times (x) to 1.25x.
-- 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 Morningstar “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-1 and Class A-2 Notes reflect the 42.65% of initial hard credit enhancement provided by the subordinated Notes in the pool, the Reserve Account (1.00%) and overcollateralization (1.50%). The ratings on the Class B, Class C, Class D, Class E and Class F Notes reflect 33.90%, 22.50%, 12.30%, 7.85% and 2.50% 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 Morningstar 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 [email protected].

For more information on this credit or on this industry, visit www.dbrs.com or contact us at [email protected].

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