KBRA Assigns Ratings to Avant Loans Funding Trust 2024-REV1
30 Jul 2024 | New York
KBRA assigns ratings to five classes of notes issued by Avant Loans Funding Trust 2024-REV1 (“AVNT 2024-REV1”), an unsecured consumer loan ABS transaction. AVNT 2024-REV1 has initial hard credit enhancement level of 51.48% for the Class A Notes to 3.61% for the Class E Notes. Credit enhancement consists of overcollateralization, yield supplement overcollateralization, subordination (except for the Class E Notes), a cash reserve account funded at closing and excess spread.
This transaction represents Avant, LLC’s (“Avant,” or the “Company”) first-rated securitization of 2024 and 15th overall. AVNT 2024-REV1 issued five classes of notes totaling $200.0 million, collateralized by a trust certificate backed by unsecured consumer loans originated through Avant’s online marketplace lending platform (“Avant Platform”). The transaction has a three-month prefunding period, during which approximately $9.2 million in additional loans will be acquired. Additionally, during the two-year revolving period, which includes the 3-month prefunding period, additional loans will be acquired periodically.
Founded in 2012, Avant is located in Chicago, Illinois and operates an online lending platform, which offers unsecured personal loans and credit cards primarily to non-prime consumers through the Avant Platform. Avant’s typical unsecured personal loan borrowers have FICO scores between 550 and 720, an original term of 12 to 60 months, an original balance of $1,000 to $35,000, and a fixed APR of 9.95% to 36.00%. The Avant Platform charges an upfront administration fee to borrowers ranging from 1.50% to 9.99%. Loans are typically used for debt consolidation, emergency expenses, life event, or car repair purposes.
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 portfolio pool data, underlying collateral pool and capital structure. KBRA considered its operational reviews of Avant, as well as periodic update calls with the Company. Operative agreements and legal opinions were reviewed prior to closing.
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