NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes (the “Notes”) issued by TruPS Financials Note Securitization 2018-1 (“TFINS 2018-1”).
The collateral in TFINS 2018-1 will consist of trust preferred securities (“TruPS”) and subordinated notes issued mainly by community and regional banks and their holding companies, and TruPS, subordinated notes, and a senior note issued by insurance companies and their holding companies. The total portfolio par amount is $537.75 million with exposures to 62 banks and 4 insurance companies. The portfolio is expected to be fully ramped at closing.
TFINS 2018-1 is a static cash flow CDO and will not allow for any reinvestments. The preliminary ratings reflect the initial credit enhancement levels ranging from 28.5% for the Class A Notes to 13.0% for the Class C Notes. Additional enhancement is comprised of overcollateralization and interest rate tests for all Notes and a turbo payment that will amortize the Class A Notes beginning in the eighth year.
EJF CDO Manager LLC, an affiliate of EJF Capital LLC (“EJF Capital”), is the collateral manager. EJF Capital is headquartered in Arlington, VA. Founded in 2005 by Manny Friedman and Neal Wilson, it has more than $5.4 billion under management and is a SEC registered investment advisor. EJF Capital focuses on investment opportunities in financial institutions which may include banks, insurance companies, REITs and specialty finance companies. The firm has 75 employees with an investment team of 30 professionals. This will be the sixth securitization of bank and/or insurance securities since 2015 for EJF Capital.
KBRA analyzed the transaction using the General Rating Methodology for Asset-Backed Securities published on November 28, 2017 and incorporated the Global Insurer & Insurance Holding Company Rating Methodology and Global Bank and Bank Holding Company Rating Methodology for analyzing the underlying collateral obligations.
For complete details on the analysis, please see KBRA’s Pre-Sale Report, TruPS Financials Note Securitization 2018-1 Pre-Sale Report, which was published today at www.kbra.com.
The preliminary rating is based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final rating that differ from the preliminary rating.
|Class||Preliminary Rating||Initial Principal Amount|
|Class A-1 Notes||AA- (sf)||$360,790,000|
|Class A-2 Notes||AA- (sf)||$23,700,000|
|Class B Notes||A (sf)||$12,100,000|
|Class C Notes||BB-(sf)||$71,250,000|
Representations & Warranties Disclosure
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report available here.
Related Publications: (available at www.kbra.com)
- General Rating Methodology for Asset-Backed Securities
- Global Insurer & Insurance Holding Company Rating Methodology
- Global Bank and Bank Holding Company Rating Methodology
About KBRA and KBRA Europe
KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.