KBRA Assigns Preliminary Ratings to Carvana Auto Receivables Trust 2019-2

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to seven
classes of notes issued by Carvana Auto Receivables Trust 2019-2 (“CRVNA
2019-2”) an auto loan ABS Transaction. CRVNA 2019-2 represents the
second term ABS securitization for Carvana LLC (Carvana or the
“Company”) in 2019.

In 2012, DriveTime Automotive Group Inc. (DriveTime) launched Carvana an
eCommerce platform for buying used vehicles. Carvana’s website (www.Carvana.com)
offers a unique used vehicle buying experience that enables customers to
purchase vehicles online through an efficient and transparent process.
Carvana’s target customer demographic is not specific to credit and is
geared to attract a broader credit spectrum and income classification
than that of DriveTime. Initially launched in Atlanta, Georgia, Carvana
has expanded nationally and is now operating in 131 markets. Carvana’s
business and operations fully integrate all steps of the vehicle
purchase process. The Company is led by founder and CEO Ernie Garcia III
who currently owns approximately 10%. The company completed its IPO in
April 2017, and the stock trades on the New York Stock Exchange under
the symbol CVNA.

CRVNA 2019-2 trust will issue seven classes of notes rated AAA (sf)
though BB (sf) totaling $457.075 million. Class A-1 is rated K1+ (sf),
KBRA’s highest short-term credit rating. The transaction is expected to
be collateralized by approximately $470 million of automobile loans at
closing. The automobile loans are fixed rate installment loans, made to
prime and subprime borrowers with a weighted average non-zero FICO score
of 636. In addition, the loans have an average current principal balance
of $17,955, weighted average interest rate of 13.84%, and weighted
average original term and remaining term of 70 and 68 months,
respectively. The collateral is 100% used vehicles.

The transaction has initial credit enhancement levels of 49.05% for the
Class A Notes, 33.80% for the Class B Notes, 23.65% for the Class C
Notes, 12.20% for the Class D Notes and 4.00% for the Class E Notes.
Credit enhancement consists of excess spread, overcollateralization,
subordination (except for the Class E Notes) and a reserve account
funded at closing. Bridgecrest Credit Company (Bridgecrest), is an
affiliate of DriveTime and will be the primary servicer of the
securitization.

KBRA applied its Global Auto Loan ABS 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 also review the operative agreements and legal
opinions for the transaction prior to closing.

To access ratings, reports and disclosures, click here.

Preliminary Ratings Assigned: Carvana Auto Receivables Trust 2019-2

Related Publications: (available at www.kbra.com)

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

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. 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, and
is a certified Credit Rating Agency (CRA) by the European Securities and
Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.

Contacts

Analytical Contacts:
Alla
Mikhalevsky, CFA, Director
(646) 731-3356
amikhalevsky@kbra.com

Pritam Patel, Senior Analyst
(646) 731-3374
ppatel@kbra.com

Eric Neglia, Managing Director
(646) 731-2405
eneglia@kbra.com

Rosemary Kelley, Senior Managing Director
(646) 731-2337
rkelley@kbra.com