Arra Finance used some terminology from academia on Tuesday when announcing the successful closing of its inaugural auto receivables asset-backed securitization transaction.

The nonprime auto finance company said the 4(a)(2) transaction was co-sponsored by a fund managed by Obra Capital, with Goldman Sachs serving as sole structuring agent.

According to a news release, the AA through BB-rated private offering was evaluated by a top U.S. ratings agency focused on nonprime auto finance and received strong interest from select large institutional investors.

“In less than two years, Arra has scaled into a credible, disciplined participant in the auto ABS market,” Arra Finance chief financial officer Steven Lackowski said. “Today’s success validates the capital markets thesis we have held since day one, accelerated by our acquisition of Crescent Bank’s auto finance assets and now accomplished with our first rated transaction.”

Lackowski continued that the offering marks a key milestone in Arra’s strategy, further diversifying the company’s funding base and providing additional capital markets capacity to support a robust ABS issuance program.

“The validation we received from investors and ratings agencies alike reflects the strength of our underlying auto receivables portfolio, the underwriting diligence that has driven the development of the Arra platform since launch and the quality of our high touch servicing for over $700 million in auto receivables,” Lackowski said.

“We are already looking forward to a more widely syndicated issuance as we continue scaling our operations and bringing attractive opportunities to market,” he went on to say.

Blair Wallace is president and CEO of Obra Capital, which spearheaded the acquisitions that created Arra Finance.

“Obra is pleased to have one of its managed funds co-sponsor Arra’s first auto ABS issuance,” Wallace said. “Arra continues to demonstrate market leadership in nonprime auto finance, and we believe it is well-positioned to continue creating long-term value for its partners and investors as it enters this next stage of business development.”

Arra Finance chief executive officer Kenn Wardle added that, “This is a true landmark moment for Arra.

“This achievement directly reflects our team’s cross-platform efforts to grow our portfolio, consistently deliver quality pricing to dealers and consumers and implement sound servicing practices that maintain long-term performance. With strong momentum, we look forward to capitalizing on the opportunities ahead,” Wardle went on to say.