KBRA Assigns Preliminary Ratings to Brex Commercial Charge Card Master Trust, Series 2024-1
7 Mar 2024 | New York
KBRA assigns preliminary ratings to two classes (three tranches) of notes that will be issued from Brex Commercial Charge Card Master Trust, Series 2024-1 (“Brex 2024-1”), a corporate charge card asset backed securities transaction issued out of the Brex Commercial ChargeCard Master Trust (“Master Trust”). The ratings reflect the initial credit enhancement levels of 25.77% for the Class A-1 notes and 4.42% for the Class B notes. Credit enhancement on the notes consists of; overcollateralization, subordination (except for the class B notes), a reserve account funded at closing, and excess spread generated by discounting the pool balance. Brex 2024-1 will include a revolving period of approximately 23 months.
Brex Inc. (“Brex”) is the Sponsor, Servicer, Administrator, and Seller for the transaction. Brex 2024-1, represents the Company’s fourth series issued out of the Master Trust. The Brex 2024-1 Notes are collateralized by a pool of non-revolving corporate charge card accounts, and receivables created from those accounts in the Master Trust, for which the Series 2024-1 Notes are allocated a percentage interest. The accounts are opened through the Brex platform and ultimately approved and originated through its partner bank relationships.
The collateral in the Master Trust as of the February 5, 2024, Information Date includes approximately $326 million of receivables. Excluding accounts with a principal balance less than or equal to zero, the accounts have an average principal balance of $34,974, an average underwriting cash balance of $4.5 million, and an average active credit limit of $270,122.
KBRA analyzed the transaction using the General Global Rating Methodology for Asset-Backed Securities and Credit Card ABS Global Rating Methodology as well as its Global Structured Finance Counterparty Methodology and ESG Rating Methodology. This transaction falls within “Category 1 – Financial Assets” categorization noted within the General Global Rating Methodology for Asset Backed Securities, which typically relates to transactions that are backed by pools of consumer or commercial financial obligations owed by diverse obligors.
In applying the methodologies, KBRA analyzed performance data and the underlying collateral pool and analyzed the capital structure using stressed cash flow assumptions. KBRA considered its operational review of the Company. Operative agreements and legal opinions will be reviewed prior to closing.
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