By Daniel Webster, dWeb.News Publisher
NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by FREED ABS Trust 2021-3FP (“FREED 2021-3FP”), a $230. 49 million consumer loan asset-backed securities transaction. The preliminary ratings reflect initial credit enhancement levels of 58. 00% for the Class A notes, 38. 50% for the Class B notes, 28. 75% for the Class C notes, and 15. 00% for the Class D notes. Credit enhancement consists of overcollateralization, subordination (except for the Class D notes), a reserve account funded in subsequent periods after closing, and excess spread.
This transaction is the tenth ABS securitization that has been collateralized by unsecured consumer loan originated through Freedom Financial Asset Management, LLC (“FFAM”) or the “Company”. Freedom Financial Network (“FFN”) is the parent company of FFAM. It is based in San Mateo, CA and has operations in Tempe, AZ. FFN was founded in 2002 and offers consumer financial solutions including installment loans, debt restructuring, home equity lines of credit (“HELOCs”), and financial education, through its four subsidiary companies (FFAM, Freedom Debt Relief, LLC (“FDR”), Lendage, LLC (“Lendage”), and bills.com) and a fund (“Freedom Consumer Credit Fund” or “FCCF”). Since 2002, two private equity firms, Vulcan Capital and Stone Point Capital, have invested in Pantheon Partners, LLC, the parent holding company of FFN.
KBRA used its Consumer Loan ABS Global Rating Methodology along with its Global Structured Finance Counterparty Methodology. ESG Global Rating Methodology was also applied to the analysis of the transaction’s underlying capital pool, proposed capital structure, and FFAM’s historic static pool data. KBRA considered its operational review of Freedom, which was conducted in August 2019, as well as periodic update calls with the Company. Before closing, operational agreements and legal opinions will all be reviewed.
View the report. Click here to access ratings and other relevant documents.
- Consumer Loan ABS Global Rating Methodology
- Global Structured Finance Counterparty Methodology
- ESG Global Rating Methodology
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. The Information Disclosure Form(s), which can be found here, contains a description of all material sources used in credit rating preparation and details on the methodology (including any material models and sensitivity analysis of key rating assumptions) used in determining credit rating.
This page provides information about the meanings of each rating category.
Additional disclosures regarding this rating action can be found in the Information Disclosure Forms mentioned above. You can find additional information about KBRA policies, methodologies and rating scales at http://www.kbra.com.
Kroll Bond Rating Agency LLC (KBRA), is a full-service credit ratings agency that has been registered with the U.S Securities and Exchange Commission (NRSRO). Kroll Bond Rating Agency Europe Limited has been registered with the European Securities and Markets Authority as a CRA. Kroll Bond Rating Agency UK Limited has been registered with the UK Financial Conduct Authority as a temporary registration regime CRA. KBRA has been designated by the Ontario Securities Commission as a designated rating agency for asset-backed securities issuers. It can file either a shelf prospectus or a short form prospectus. KBRA is also recognized as a credit rating provider by the National Association of Insurance Commissioners.
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