KBRA Assigns Preliminary Ratings to Carvana Auto Receivables Trust 2021-N2

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of notes issued by Carvana Auto Receivables Trust 2021-N2 (“CRVNA 2021-N2”), an auto loan ABS transaction.

CRVNA 2021-N2 represents the third term ABS securitization for Carvana LLC (“Carvana” or the “Company”) in 2021, the third under its non-prime shelf, and the ninth overall. CRVNA 2021-P2 will issue six classes of notes totaling $400.0 million. The transaction is collateralized by approximately $400 million of automobile loans to primarily non-prime obligors as defined by the Company.

Carvana was founded in 2012 as an eCommerce platform for buying used vehicles. Carvana, through its website (www.Carvana.com), offers a unique used vehicle buying experience that enables customers to purchase vehicles online through an efficient and transparent process. Initially launched in Atlanta, Georgia, Carvana has expanded nationally and is now operating in 291 markets. Carvana’s business and operations fully integrate all steps of the vehicle purchase process including vehicle acquisition, trade-in, financing, and delivery.

KBRA applied its Auto Loan ABS Global Rating Methodology and Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Carvana’s historical static pool data as well as publicly available static pool loss data for comparable auto loan originators. KBRA also conducted an operational assessment on the originator and servicer, as well as a review of the transaction’s legal structure and transaction documents. KBRA will review the operative agreements and legal opinions for the transaction prior to closing.

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Related Publications

• Auto Loan ABS Global Rating Methodology
• Global Structured Finance Counterparty Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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