Sector developments and company hires

Online auto ABS debuts

Carvana, an online platform for buying used cars launched in 2012 by DriveTime Automotive Group, is marketing an inaugural securitisation. The US$338m transaction, dubbed Carvana Auto Receivables Trust 2019-1, comprises seven classes of notes provisionally rated by KBRA as triple-A on the class A1 and A2 notes, through to double-B on the class E notes.

According to KBRA the auto loans are fixed rate installment loans, made to prime and subprime borrowers with a weighted average non-zero FICO score of 635. In addition, the loans have an average current principal balance of US$17,998, weighted average interest rate of 13.47%, and weighted average original term and remaining term of 70 and 69 months, respectively. The collateral is 100% used vehicles. Carvana will use the net proceeds from the issuance of the notes to pay down existing debt and for general operating purposes.

Acquisitions

Brookfield Asset Management is set to acquire approximately 62% of the Oaktree Capital Group business. As part of the transaction, Brookfield will acquire all outstanding Oaktree class A units for, at the election of the unitholders, either US$49 in cash or 1.0770 class A shares of Brookfield per unit (subject to pro-ration). The Oaktree board, acting on the recommendation of a special committee, has unanimously recommended that Oaktree unitholders approve the transaction. Both Brookfield and Oaktree will continue to operate their respective businesses independently, partnering to leverage their strengths – with each remaining under its current brand and led by its existing management and investment teams. Co-chairman of Oaktree Howard Marks will join Brookfield’s board of directors. The transaction is subject to the approval of Oaktree unitholders, but is expected to close in 3Q19.