KBRA Assigns Preliminary Rating to TVEST 2020A, LLC Note

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns a preliminary rating to one class of notes from TVEST 2020A, LLC, a $123 million securitization collateralized by litigation finance and medical receivables serviced by Experity Ventures LLC (“Experity”).

The TVEST 2020A, LLC notes (“Notes”) represents Experity’s first ABS securitization collateralized by litigation finance and medical receivables. Experity, formed in April, 2019, is the parent company of the various receivable originators including Thrivest Legal Funding LLC (“Thrivest”), a direct to market pre-settlement legal funding company with a history of originations dating back to 2009 and ProMed Capital Venture LLC (“ProMed”), a recently acquired leading medical lien funding company that has been originating since 2017. Experity is also the parent of four other litigation finance receivable originators that were formed in connection with strategic financing and operational partnerships with third parties.

The portfolio securing the transaction has an aggregate discounted receivable balance (“ADPB”), including assumed prefunding, of approximately $160 million as of the May 31, 2020 cutoff date. The ADPB is the aggregate discounted cash flows of the collections associated with the TVEST 2020A, LLC portfolio’s litigation funding receivables (“Litigation Receivables”) and medical receivables (“Medical Receivables” and, collectively, “Receivables”). The discount rate used to calculate the ADPB is a percentage equal to the sum of the assumed interest rate on the Notes, the servicing fee rate of 1.00%, and an additional 0.10%. As of the cutoff date, Medical Receivables comprise 83.20% of the portfolio by count and 67.44% by advance amount and have an average advance to expected settlement case value (“Expected Case Worth Ratio”) of 22.06%. Litigation Receivables comprise the remaining 16.80% of the portfolio by count and 32.56% by advance amount and have and Expected Case Worth Ratio of 8.77%.

The Notes benefit from credit enhancement in the form of overcollateralization, a cash reserve account and a capitalized interest account. The transaction also features a $20 million prefunding account that may be used to purchase additional Receivables during the three months after closing, subject to certain eligibility criteria.

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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.

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KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. 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 and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA.