KBRA Assigns Preliminary Ratings to Foundation Finance Trust 2021-2

NEW YORK–(BUSINESS WIRE)–#KBRA–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Foundation Finance Trust 2021-2 (“FFIN 2021-2”), an asset-backed securitization collateralized by unsecured consumer loans primarily used for home improvements.

FFIN 2021-2 will issue four classes of notes totaling $301,437,000, collateralized by approximately $189.5 million of receivables at closing and $115 million to be acquired during the prefunding period. FFIN 2021-2 has initial credit enhancement levels ranging from 17.30% for the Class A notes to 1.50% 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 Finance Company (“Foundation”) was founded in 2012 through the partnership of an experienced management team and Garrison Investment Group (“Garrison”). Foundation is approximately 99% owned by Garrison, a leading middle-market credit and asset-based investment management firm with approximately $1.3 billion in assets under management as of June 30, 2021.

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.

Click here to view the report. To access ratings and relevant documents, click here.

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


Melvin Zhou, CFA, Senior Director (Lead Analyst)

+1 (646) 731-2412

melvin.zhou@kbra.com

Alex Luthringer, Senior Analyst

+1 (646) 731-1252

alex.luthringer@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