KBRA Assigns Preliminary Ratings to PEAR 2022-1, LLC

NEW YORK–(BUSINESS WIRE)–#KBRA–KBRA assigns preliminary ratings to three classes of notes issued by PEAR 2022-1, LLC, a securitization collateralized by litigation finance receivables and medical receivables.

The PEAR 2022-1, LLC transaction represents Golden Pear Funding OpCo, LLC’s (Golden Pear or the Company) third ABS collateralized by litigation finance receivables and the first to include medical receivables. Golden Pear is a litigation finance company that conducts business throughout the U.S. but is concentrated primarily in the New York area. As of August 2022, the Company, including originations of predecessor company Golden Pear Funding, LLC, has funded over $825 million in aggregate advances dating back to 2008.

The portfolio securing the transaction has an aggregate discounted projected balance of the receivables (ADPB) of approximately $130.8 million as of September 15, 2022 (Cutoff Date). The ADPB is the aggregate discounted cash flows of the collections associated with the PEAR 2022-1 portfolio’s litigation funding receivables (Litigation Receivables) and medical receivables (Medical Receivables). The discount rate used to calculate the ADPB is a percentage equal to the sum of the weighted average assumed interest rate on the notes, the servicing fee rate of 1.00%, and an additional 0.10%. As of the Cutoff Date, Litigation Receivables comprise approximately 88% of the portfolio by outstanding receivable principal balance and have an average advance to expected case worth ratio (Expected Case Worth Ratio) of 15.5%. Medical Receivables comprise the remaining approximate 12% of the portfolio by outstanding receivable balance and have an Expected Case Worth Ratio of 20.0%.

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Related Publications

• General Global Rating Methodology for Asset‑Backed Securities
• 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


Joanne DeSimone, Senior Director (Lead Analyst)

+1 (646) 731-2306

joanne.desimone@kbra.com

William Frawley, Analyst

+1 (646) 731-1306

william.frawley@kbra.com

Rosemary Kelley, Senior Managing Director (Rating Committee Chair)

+1 (646) 731-2337

rosemary.kelley@kbra.com

Business Development Contact


Arielle Smelkinson, Senior Director

+1 (646) 731-2369

arielle.smelkinson@kbra.com