KBRA assigns preliminary ratings to five classes of notes issued by Flagship Auto Securitization Trust 2026-1 (“FAST 2026-1”), an auto loan ABS transaction. FAST 2026-1 represents the first term ABS securitization in 2026 sponsored by FFG Funding LLC, a wholly owned subsidiary of Flagship Financial Group LLC (“Flagship” or the “Company”).
Flagship was formed in September 2025 and commenced operations in January 2026 following the acquisition of the origination and servicing operations of Flagship Credit Acceptance LLC (“Former Flagship”). Former Flagship was established in 2010 and originated and serviced auto loans. The Company has maintained operational continuity with Former Flagship, generally retaining its staffing, systems, and infrastructure. However, Flagship has updated its underwriting models and shifted its originations towards lower-risk internal credit grades compared to Former Flagship, leveraging Former Flagship’s historical loan and application data. The Company funds its automobile lending activities with equity capital and ongoing asset sales to FFG Funding LLC under a forward flow purchase agreement. FFG Funding LLC, in turn, funds its activities with equity capital and warehouse lines of credit.
Flagship originates loans through two channels: Indirect and Direct. Under the Indirect channel, Flagship purchases automobile loan contracts from predominantly franchised dealerships that arrange financing for customers purchasing new or used vehicles. Under the Direct channel, Flagship originates loans to customers refinancing existing auto loans through third-party referral partners, which source consumers through print advertising, online searches and other referral sources.
FAST 2026-1 will issue five classes of notes totaling $288.8 million. Initial credit enhancement consists of overcollateralization, subordination (except for the Class E notes), a reserve account funded at closing, and excess spread.
KBRA applied its Auto Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology as part of its analysis of the static pool data and the underlying collateral pool and stressed the capital structure based upon its stress case cash flow assumptions. KBRA considered its operational review of Flagship, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.
To access ratings and relevant documents, click here.
Click here to view the report.
Methodologies
- ABS: Auto Loan ABS Global Rating Methodology
- Structured Finance: 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), one of the major credit rating agencies (CRA), is a full-service CRA 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. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.
Doc ID: 1017292
View source version on businesswire.com: https://www.businesswire.com/news/home/20261001961163/en/
Media gallery
