KBRA Assigns Preliminary Ratings to Oportun Funding 2022-1, LLC
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NEW YORK–(BUSINESS WIRE)–KBRA assigns preliminary ratings to two bond classes for Oportun Funding 2022-1, LLC (“Oportun 2022-1”), a $400 million consumer loan ABS transaction dollars with KBRA noting Class A and Class B tickets totaling $378.949 million. Unlike several other transactions of Oportun, Inc. (“Oportun” or the “Company”) which included a revolving period during which additional eligible collateral could be acquired in the securitization trust, Oportun 2022-1 will be secured by a non-revolving pool of eligible guarantees. repayable consumer loans issued by Oportun.
Oportun 2022-1 represents ABS’s nineteenth securitization secured by unsecured and secured consumer installment loans issued by Oportun, a wholly owned subsidiary of Oportun Financial Corporation, a consumer finance company based in California and listed on NASDAQ. The Company provides financial services, including unsecured and secured personal installment loans, to borrowers who have no credit score or who may have a limited credit history. Oportun has been issuing unsecured consumer loans for 15 years and, in April 2020, began offering personal secured installment loans (“SPLs”) that are at least partially secured by auto title.
As of December 31, 2021, the average unsecured loan size ranged from $300 to $11,300 with an average of $3,357. As of December 31, 2021, the weighted average APR was 32.4% and the initial weighted average term was 35 months. For secured personal loans, the average loan size ranges from $2,525 to $20,000 with terms of 21 to 64 months. Loans generally require semi-monthly or fortnightly (or monthly as required by law) payments, which is close to when a client receives a salary.
KBRA analyzed the transaction using the ABS Global Consumer Lending Rating Methodology as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of pool data. portfolio, underlying collateral pool and capital structure. KBRA considered its operational reviews of Oportun, as well as periodic due diligence calls with the company. Operational agreements and legal opinions will be reviewed prior to closing.
Further information on key credit considerations, sensitivity analyzes that consider factors that may affect these credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned above.
A description of all substantially significant sources that were used to prepare the credit rating and information on the methodology(ies) (including all significant models and sensitivity analyzes of key relevant rating assumptions, if any) used to determine the credit rating are available. in the information disclosure form(s) located here.
Information on the meaning of each rating category can be found here.
Additional information relating to this rating metric is available in the information disclosure form(s) referenced above. Additional information regarding KBRA’s policies, methodologies, grading scales and disclosures is available at www.kbra.com.
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a rating agency with the UK Financial Conduct Authority under the temporary registration scheme. In addition, KBRA is designated as the Designated Rating Agency 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.
Michael Polvere, Associate Director (Senior Analyst)
+1 (646) 731-3339
Brendan Buckley, Analyst
+1 (646) 731-1318
Rahel Avigdor, Senior Director
+1 (646) 731-1203
Eric Neglia, Senior Managing Director (Rating Committee Chair)
+1 (646) 731-2456
Business Development Contact Information
Ted Burbage, General Manager
+1 (646) 731-3325
Source: Kroll Bond Rating Agency, LLC