KBRA awards preliminary grades to FREED ABS Trust 2022-4FP
NEW YORK–(BUSINESS WIRE)–KBRA assigns preliminary ratings to four classes of bonds issued by FREED ABS Trust 2022-4FP (“FREED 2022-4FP”), a $283.15 million consumer lending asset-backed securities transaction. dollars. Preliminary ratings reflect initial credit enhancement levels of 67.85% for Class A Notes, 45.10% for Class B Notes, 34.70% for Class C Notes and 18.30% for Class C Notes. Class D Notes. Credit enhancement consists of overcollateralization, subordination (except Class D Notes), reserve account funded in subsequent periods after closing and excess spread.
This transaction represents ABS’s fourteenth global securitization secured by unsecured consumer loans issued by Freedom Financial Asset Management, LLC (“FFAM” or the “Company”). Freedom Financial Network (“FFN”), the parent company of FFAM, is a San Mateo, CA-based company with operations in Tempe, AZ. FFN was founded in 2002 and provides consumer financial solutions, including installment loans, debt restructuring, home equity lines of credit (“HELOC”) and financial education, through its four subsidiaries (FFAM, Freedom Debt Relief, LLC (“FDR”), Lendage, LLC (“Lendage”) and bills.com) and a fund (“Freedom Consumer Credit Fund” or “FCCF”). Since 2002, two private equity firms, Vulcan Capital and Stone Point Capital, have invested in Pantheon Partners, LLC, the parent company of FFN.
KBRA applied its global ABS rating methodology for consumer loans, as well as its global structured financial counterparty methodology and its global ESG rating methodology as part of its analysis of the underlying collateral pool of the transaction, the proposed capital structure and historical data of FFAM’s static pool. KBRA reviewed its operational review of Freedom, as well as periodic update calls with the company. Operational agreements and legal opinions will be reviewed prior to closing.
Further information on key credit considerations, sensitivity analyzes that consider factors that may affect these credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned above.
A description of all substantially significant sources that were used to prepare the credit rating and information on the methodology(ies) (including all significant models and sensitivity analyzes of key relevant rating assumptions, if any) used to determine credit rating are available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be found here.
Additional information relating to this rating metric is available in the information disclosure form(s) referenced above. Additional information regarding KBRA’s policies, methodologies, grading scales and disclosures is available at www.kbra.com.
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a rating agency with the UK Financial Conduct Authority under the temporary registration scheme. Additionally, KBRA is designated as the Designated Rating Agency 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.