KBRA Assigns Preliminary Ratings to Cherry Securitization Trust 2026-1

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to four classes of notes issued by Cherry Securitization Trust 2026-1 ("CHRY 2026-1"), a consumer loan retail installment contract ABS transaction. The preliminary ratings reflect initial credit enhancement levels ranging from 26.24% for the Class A notes to 1.38% for the Class D notes. Credit enhancement on the notes is comprised of overcollateralization, subordination (except for the Class D Notes), a non-declining reserve fund funded at closing, and excess spread.

This transaction represents Cherry’s third overall 144A ABS securitization, and the first of 2026. CHRY 2026-1 will issue four classes of notes totaling $350.0 million, which are collateralized by Receivables used for elective medical procedures. The transaction features a 24-month revolving period (the “Revolving Period”), which will end on the earlier of (i) June 30, 2028, and (ii) the date on which an Amortization Event has occurred. During the Revolving Period, the Seller will transfer additional Receivables to the Issuer, who will purchase such additional Receivables so long as (a) the Issuer and the Receivables satisfy all conditions set forth in the transaction documents and (b) an Amortization Event has not occurred. The transaction features an Optional Redemption, whereby the Certificateholders holding 100% of the Certificates have the right to redeem the Notes, in whole but not in part, on any Business Day on or after the fifth Business Day prior to the Monthly Payment Date in July 2028.

Founded in 2017 as Mason Finance, and rebranded to Cherry Technologies, Inc. (“Cherry” or the “Company”) in 2019, Cherry operates a digital platform (the “Cherry Platform”) that facilitates point-of-sale unsecured consumer loans and retail installment sale contracts to finance elective medical services to primarily prime borrowers through a network of over 64,000 unique merchants. Since inception, the Company has funded approximately $5.0 billion across 2.6 million transactions. Cherry currently offers financing in all 50 states and the District of Columbia through its banking partners via the Cherry Platform.

KBRA applied its Consumer Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology as part of its analysis of the portfolio pool data, underlying collateral pool and capital structure. KBRA considered its operational reviews of Rocket, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.

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Methodologies

• ABS: Consumer Loan ABS Global Rating Methodology
• Structured Finance: Global Structured Finance Counterparty 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), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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