NEW YORK–(BUSINESS WIRE)–#KBRA–KBRA assigns preliminary ratings to four classes of notes issued by Foundation Finance Trust 2023-2 (“FFIN 2023-2”), an asset-backed securitization collateralized by unsecured consumer loans primarily used for home improvements.
FFIN 2023-2 will issue four classes of notes totaling $290.218 million, collateralized by $324.99 million of receivables at closing. FFIN 2023-2 has initial credit enhancement levels ranging from 32.80% for the Class A notes to 11.20% for the Class D notes. Credit enhancement is comprised of overcollateralization, subordination of junior note classes (except for the Class D notes), a cash reserve account and excess spread.
Foundation was founded in 2012 through the partnership of an experienced management team and Garrison Investment Group (“Garrison”). In September 2022, Foundation was acquired by InterVest Capital Partners (“InterVest”) a New York-based investment management firm, which manages or advises funds and accounts that specialize in specialty finance and real estate investment since 1999. InterVest owns 76.5% of the business and the balance is owned by the Foundation management team.
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 portfolio pool data, underlying collateral pool and capital structure. KBRA considered its operational reviews of Foundation, as well as regular due diligence calls with Foundation. Operative agreements and legal opinions will be reviewed prior to closing.
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- 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.
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.
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. 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.
Melvin Zhou, Managing Director (Lead Analyst)
Juhi Paranjape, Senior Analyst
Rahel Avigdor, Managing Director (Rating Committee Chair)
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Arielle Smelkinson, Senior Director