KBRA Assigns Ratings to RFS Asset Securitization II LLC, Series 2024-1 Notes and Affirms Ratings of Existing Notes
31 Jul 2024 | New York
KBRA assigns ratings to notes issued RFS Asset Securitization II LLC (the “Issuer”). RFS Asset Securitization II LLC will issue five classes of Series 2024-1 Notes totaling $160 million initially. In conjunction with the issuance of Series 2024-1 Notes, KBRA affirms the ratings on the Issuer’s outstanding Series 2021-1 Notes and the Series 2022-1 Notes. All three series share in the same collateral pool. The ratings are consistent with the results of our cash flow analysis following the addition of the Series 2024-1 Notes.
Rapid Financial Services, LLC (“RFS”), a Delaware limited liability company and Small Business Financial Solutions, LLC, a Delaware limited liability company (“SBFS”, together with RFS, the “Company”) is a specialty financial services company that uses its proprietary risk scoring models, transactional data, and technology systems to provide capital to small and medium-sized businesses. RFS was founded in 2009 and since inception has provided over $4.2 billion in financing to over 55,000 businesses nationwide. As of March 31, 2024, the Company had 177 employees and is headquartered in Bethesda, MD.
The proceeds of the sale of the Series 2024-1 Notes will be used to purchase receivables, fund the reserve account and pay related fees and expenses. The Series 2024-1 Notes are “expandable” term notes such that at any time during the Revolving Period, the Issuer may periodically upsize the Series 2024-1 Notes, up to a maximum amount of $500 million, as long as certain conditions are met, including receipt of Rating Agency Confirmation.
The transaction also features a revolving period (the “Revolving Period”), which will end on the earlier of (i) prior to the close of business on June 30, 2027, approximately 36 months after the initial closing date and (ii) the date on which a Rapid Amortization Event has occurred. During the Revolving Period, the Seller will transfer additional Receivables to the Issuer, who will purchase such additional eligible Receivables so long as (a) the Issuer and the Receivables satisfy all conditions set forth in the transaction documents and (b) a Rapid Amortization Event has not occurred and is not continuing.
Credit enhancement will consist of overcollateralization, subordination (except for the Class E Notes), excess spread, a reserve account (funded at closing) and the excess funding account.
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