KBRA issues preliminary ratings for Oportun Issuance Trust 2021-C
NEW YORK–(BUSINESS WIRE) – Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two classes of debt securities issued by Opportunity Issuance Trust 2021-C (“OPTN 2021-C”), a US $ 500 million ABS consumer credit transaction Dollars, with KBRA classifying Class A and Class B notes with a total value of $ 436.266 million. The transaction has a three year revolving period during which additional secured and unsecured consumer installment collateral can be purchased in the securitization trust, provided that it meets certain concentration limits and eligibility criteria. The preliminary ratings reflect an initial credit improvement of 26.53% and 14.95% of the Class A and Class B bonds, respectively. The credit enhancement consists of overcollateralization, subordination, excess spread and a cash reserve.
OPTN 2021-C represents the eighteenth ABS securitization backed by unsecured and secured consumer installment loans issued by Oportun, Inc., a wholly-owned subsidiary of Oportun Financial Corporation (“Oportun” or the “Company”), a publicly traded company , California-based NASDAQ-listed consumer finance company. The company provides financial services, including both unsecured and secured installment loans, to borrowers who have no creditworthiness or poor creditworthiness. Oportun has been providing unsecured consumer loans for 15 years and has been offering secured personal installment loans (“SPL”) since April 2020, at least partially secured by a car title.
As of the statistical calculation date, loan sizes range from $ 300 to $ 12,000, have an original term of seven to 54 months, and have an interest rate cap of 36% per year. The average initial loan amount for new customers is $ 2,442 and the average initial loan amount for renewal customers is $ 4,235. Loans typically require bi-weekly or bi-monthly payments (or monthly as required by law), near the time a customer is paid. Approximately 50% of Oportun’s new customers do not have a FICO score.
KBRA analyzed the transaction with the Consumer Loan ABS Global Rating Methodology as well as the Global Structured Finance Counterparty Methodology and the ESG Global Rating Methodology as part of the analysis of the portfolio pool data, the underlying collateral pool and the capital structure. KBRA reviewed its operational reviews of Oportun as well as regular due diligence discussions with the company. Company agreements and legal opinions are checked before they are concluded.
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Learn more about key credit considerations, sensitivity studies that take into account what factors may affect those credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (if they are a material factor in changing creditworthiness or the rating outlook). ) can be found in the full assessment report above.
A description of all material material sources that were used to establish the rating and information about the methodology (s) (including any material models and sensitivity analyzes of the relevant material rating assumptions, if applicable) that were used in determining the rating is available on the information disclosure form (s) located here.
Information on the meaning of the individual assessment categories can be found here.
Further information on this rating measure can be found in the information disclosure forms mentioned above. Further information on KBRA guidelines, methods, rating scales and indications is available at www.kbra.com.
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered as an NRSRO with the Securities and Exchange Commission. 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 with the UK Financial Conduct Authority as a CRA under the temporary registration system. In addition, KBRA has been named by the Ontario Securities Commission as the designated rating organization for issuers of asset-backed securities for the submission of a short prospectus or shelf prospectus. KBRA is also recognized as a credit rating provider by the National Association of Insurance Commissioners.