KBRA Assigns Preliminary Ratings to PEAR 2024-1, LLC

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to three classes of notes issued by PEAR 2024-1, LLC (PEAR 2024-1), a securitization collateralized by litigation finance receivables and medical receivables.

PEAR 2024-1 represents Golden Pear Funding OpCo, LLC’s (Golden Pear or the Company) fifth litigation finance ABS. Golden Pear is a litigation finance company that conducts business throughout the U.S. but is concentrated primarily in the New York area. As of December 2023, the Company, including originations of predecessor company Golden Pear Funding, LLC, has funded over $1 billion in aggregate advances dating back to its founding in 2008.

PEAR 2024-1 will issue three classes of notes. The notes benefit from credit enhancement in the form of overcollateralization, a cash reserve account and, to the extent that the overcollateralization trigger is in effect, subordination for senior classes. The portfolio securing the transaction has an aggregate discounted projected balance of the receivables (ADPB) of approximately $83.28 million as of January 10, 2024 (Cutoff Date). The ADPB is the aggregate discounted cash flows of the collections associated with the PEAR 2024-1 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 weighted average assumed interest rate on the notes, the servicing fee rate of 1.00%, and an additional 0.10%. The outstanding principal balance as of the Cutoff Date is $67.65 million (Cutoff Date Principal). Litigation Receivables comprise 93.88% of the Cutoff Date Principal and have an average advance to expected case worth ratio (Expected Case Worth Ratio) of 14.37%. Medical Receivables comprise the remaining 6.12% of the Cutoff Date Principal and have an Expected Case Worth Ratio of 16.97%. The transaction also features a $25 million prefunding account that is funded through the note issuance and may be used to purchase additional eligible Litigation Receivables during the month after closing (Funding Period).

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Methodologies

• ABS: General Global Rating Methodology for Asset Backed Securities
• Structured Finance: Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

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.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. 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 as a CRA with the UK Financial Conduct Authority. 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.

Doc ID: 1003161