KBRA Assigns Preliminary Ratings to Aqua Finance Trust 2021-A

NEW YORK–(BUSINESS WIRE)–#KBRA–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Aqua Finance Trust 2021-A (“Aqua 2021-A”), a $759.5 million consumer loan asset-backed securities transaction. The preliminary ratings reflect initial credit enhancement levels ranging from 23.10% for the Class A notes to 2.50% for the Class C notes. Credit enhancement is comprised of overcollateralization, subordination of junior note classes (except for the Class C Notes), a cash reserve account and excess spread.

This securitization represents the fourth public term securitization for Aqua Finance, Inc. (“Aqua” or the “Company”) and its affiliates. The transaction is collateralized by a pool of retail installment sale contracts and agreements used by consumers to purchase water treatment equipment, make home improvements, and acquire certain recreational products such as marine and recreational vehicles.

Aqua was founded in 1985 and incorporated in January 1988, and is a consumer finance company operating in all 50 states. In August 2018, a Blackstone managed fund acquired an 80% ownership stake in Aqua. As of June 30, 2021, the Company owns and services more than 340,000 Contracts with an aggregate outstanding balance of approximately $2.6 billion.

KBRA applied its Consumer Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Aqua’s historical static pool data. KBRA considered its operational review of Aqua, which was conducted in April 2019 at its Wausau, WI headquarters, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.

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Related Publications

• Consumer Loan ABS Global Rating Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating 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) is a full-service credit rating agency 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 pursuant to the Temporary Registration Regime. 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.

Contacts

Analytical Contacts

Romil Chouhan, CFA, Director (Lead Analyst)

+1 (646) 731-1309

romil.chouhan@kbra.com

Michael Pettigrew, Senior Analyst

+1 (646) 731-1208

michael.pettigrew@kbra.com

Eric Neglia, Senior Managing Director (Rating Committee Chair)

+1 (646) 731-2456

eric.neglia@kbra.com

Business Development Contact

Ted Burbage, Managing Director

+1 (646) 731-3325

ted.burbage@kbra.com