KBRA Assigns Ratings To TIC Home Improvement Trust 2024-A
22 Feb 2024 | New York
KBRA assigns ratings to three classes of notes issued by TIC Home Improvement Trust 2024-A (“TIC 2024-A”), an asset-backed securitization collateralized by a pool of retail installment contracts used to finance home improvement projects of which the majority relate to the purchase and installation of home water treatment systems. This transaction represents Time Investment Company, Inc.’s inaugural 144A ABS securitization.
TIC 2024-A issued three classes of notes totaling $114.7 million collateralized by approximately $128.0 million of home improvement contracts, consisting of an aggregate principal balance of the initial receivables pool of approximately $92.0 million plus an expected prefunding account balance to be deposited on the closing date of approximately $36.0 million.
The transaction has initial credit enhancement levels ranging from 22.40% for the Class A notes, to 10.90% for the Class C notes. The target enhancement level for the Class A notes is 42.00%.
Time Investment Company (“Time”) was founded in 1982, is based in West Bend, Wisconsin and has been active in the home improvement space for over 15 years. Time is an indirect consumer finance provider that originates consumer retail installment contracts primarily for home water treatment systems, HVAC systems, and other types of home improvements. Time is currently active in 48 states with 51 employees and a network of over 200 dealers.
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 Time Investment Company. Operative agreements and legal opinions were reviewed prior to closing.
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