KBRA Assigns Preliminary Ratings to Oportun Funding IX, LLC, Series 2018-B

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of Oportun Funding IX, LLC, Series 2018-B (“Oportun 2018-B”), a consumer loan asset-backed securities transaction.

The collateral in the Oportun 2018-B deal includes approximately $236.8 million of loans, as of the May 31, 2018 statistical calculation date. The transaction includes a three-year revolving period during which additional collateral may be funded in the transaction so long as it complies with certain eligibility criteria. The preliminary ratings reflect the initial credit enhancement levels ranging from 30.0% for the Class A note, 15.0% for the Class B note, 10.00% for the Class C note and 5.0% for the Class D note.

Oportun Financial Corporation is a California based consumer finance company founded in 2005 and headquartered in San Carlos, California. The Company provides unsecured installment loans to borrowers with little or no credit history who are underserved by traditional financial institutions. Oportun operates through 270 decentralized retail locations in California, Texas, Illinois, Nevada, Utah, Arizona, New Mexico, and Florida. In addition, the Company began offering loans via their mobile website in Missouri and New Mexico in 2017 and recently expanded to Wisconsin and Idaho on a “mobile-first” basis. Oportun expects to expand its footprint in 2018 and beyond, in the near term to New Jersey, North Carolina, and South Carolina via mobile website.

KBRA applied its Global Consumer Loan ABS Rating Methodology for Asset-Backed Securities as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Oportun’s historical gross loss data. KBRA also conducted an operational assessment of Oportun, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.

 

Preliminary Ratings Assigned: Oportun Funding IX, LLC, Series 2018-B

Class   Preliminary Rating   Expected Initial Class Principal
A   A+ (sf)   $165,790,000
B   BBB+ (sf)   $35,527,000
C   BB (sf)   $11,842,000
D   B (sf)   $11,842,000
   

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)

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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.

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Rosemary Kelley, 646-731-2337
Senior Managing Director
rkelley@kbra.com
or
Jenny Ovalle, 646-731-2309
Director
jovalle@kbra.com
or
William Carson, 646-731-2405
Senior Director
wcarson@kbra.com
or
Michael Polvere, 646-731-3339
Analyst
mpolvere@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Rosemary Kelley, 646-731-2337
Senior Managing Director
rkelley@kbra.com
or
Jenny Ovalle, 646-731-2309
Director
jovalle@kbra.com
or
William Carson, 646-731-2405
Senior Director
wcarson@kbra.com
or
Michael Polvere, 646-731-3339
Analyst
mpolvere@kbra.com