KBRA Assigns Preliminary Ratings to Stream Innovations 2024-2 Issuer Trust
11 Oct 2024 | New York
KBRA assigns preliminary ratings to three classes of notes issued by Stream Innovations 2024-2 Issuer Trust (“STRE 2024-2”), an asset-backed securitization collateralized by a pool of consumer loans used for home improvements. The ratings reflect the initial credit enhancement levels ranging from 15.55% for the Class A notes to 4.85% for the Class C notes. Credit enhancement on the notes is comprised of overcollateralization, subordination of junior note classes (except for the Class C notes), a cash reserve account funded at closing, and excess spread.
STRE 2024-2 is Stream Innovations Inc. (“Stream” or the “Company”) second ABS securitization. STRE 2024-2 will issue three classes of notes totaling $239.27 million. At closing, the transaction consists of approximately $175.15 million receivables, with an expected collateral balance of $250.15 million after completion of the two-month prefunding period.
Stream was founded in 2020, is based in Conshohocken, Pennsylvania and provides financing for customers of Power Home Remodeling Group, LLC (“Power Home” or the “Merchant”), under the Stream Program. Stream was founded and is owned by several of the owners of Power Home, the COO of Power Home and the CEO of Stream. Power Home, founded in 1992 and headquartered in Chester, Pennsylvania, is a home remodeling company focused on the installation and construction of residential energy efficiency and home improvement projects. Power Home has 23 offices in the U.S. and has completed over 1 million home improvement projects since inception. Power Home’s primary home improvement projects are for the installation of windows, siding, insulation, doors, and roofs. Power Home currently has over 4,000 employees and operates in 27 states.
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 Stream Innovation Inc., as well as several business updates with the Company since that time. Operative agreements and legal opinions will be reviewed prior to closing.
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