Executive Summary
This document describes KBRA’s rating methodology for property tax lien asset-backed securities (“tax lien ABS”). KBRA’s rating of a tax lien ABS transaction incorporates an analysis of: (1) the quality and projected performance of the underlying collateral, (2) the originator’s business strategy, (3) the servicer’s operational strength and (4) the transaction’s terms, including capital structure, credit enhancement and legal structure. KBRA assigns ratings to tax lien ABS using its short-term and long-term rating scales depending on the securities being rated. For more information about KBRA’s rating scales, please see KBRA’s Rating Scale and Definitions.
When rating a tax lien ABS transaction, KBRA generally analyzes the underlying collateral pool, as well as the historical redemption rates of property tax liens in the jurisdictions in which the properties related to the collateral is…