KBRA Assigns Preliminary Ratings to GreenSky Home Improvement Issuer Trust 2024-2
3 Oct 2024 | New York
KBRA assigns preliminary ratings to five classes of notes issued by GreenSky Home Improvement Issuer Trust 2024-2 ("GSKY 2024-2"), an asset-backed securitization collateralized by a pool of consumer loans used for home improvements.
GSKY 2024-2 represents the sixth 144A securitization of home improvement loans originated through the lending program administered by GreenSky, LLC (“GreenSky” or the “Company”) on behalf of federally-insured, federal or state chartered lenders in connection with the lenders’ origination of consumer loans through a network of merchants (the “GreenSky Program”) and the second securitization issued under the GreenSky Home Improvement Issuer Trust (GSKY) shelf.
GSKY 2024-2 will issue five classes (and up to eight tranches) of notes totaling $664.693 million, collateralized by 95% of economic participation interests (the "Participations") in a pool of approximately $746 million consumer loans used to finance home improvement products and services originated by Goldman Sachs Bank USA (the "Loan Originator") and Synovus Bank (the "Origination Partner") under the GreenSky Program.
Founded in 2006 and headquartered in Atlanta, GA, GreenSky administers the GreenSky Program for merchants and lenders that facilitates point-of-sale financing for consumers in the home improvement markets. In March 2022, GreenSky was acquired by The Goldman Sachs Group, Inc. and became an indirect, wholly-owned subsidiary of the Loan Originator, a New York state-chartered bank. The Loan Originator originated substantially all loans under the GreenSky Program between mid-August 2022 and mid-March 2024. Effective March 15th, 2024, the Loan Originator sold GreenSky (and certain associated assets) to a consortium of institutional investors led by Sixth Street, sold all outstanding loans made by the Loan Originator through the GreenSky Program to Synovus Bank and the Loan Originator ceased to own or originate loans made through the GreenSky Program. Approximately 55% of the loans in the transaction collateral pool were originated by the Loan Originator and approximately 45% were originated by the Origination Partner.
KBRA applied its Consumer Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the static pool data and the underlying collateral pool and stressed the capital structure based upon its stress case cash flow assumptions. KBRA considered its operational review of GreenSky, as well as several business updates with the Company.
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