KBRA Assigns Preliminary Ratings to Fora Financial Asset Securitization 2024 LLC, Series 2024-1 (FFAS 2024-1)
7 Aug 2024 | New York
KBRA assigns preliminary ratings to notes issued Fora Financial Asset Securitization 2024 LLC (the “Issuer”). The Issuer will issue five classes of Notes (collectively, the “Notes” or “Series 2024-1 Notes”) Series 2024-1 Notes totaling $127 million. The FFAS 2024-1 transaction is the third securitization for the Company.
Fora Financial LLC founded in 2008, provides financing to small and medium-sized business through the use of proprietary risk scoring models, transactional data and technology systems. Fora originates small business loans and purchases advance business receivables through three originators: Fora Financial Business Loans LLC (“FFB”), Fora Financial Advance LLC (“FFA”), and Fora Financial West, LLC (“FFW”). Fora has funded over $4.0 billion to more than 35,000 Merchants and employs 150 people between its New York and Miami offices.
The proceeds of the sale of the Series 2024-1 Notes will be used to purchase receivables, fund the reserve account and pay related fees and expenses. The Series 2024-1 Notes are “expandable” term notes such that at any time during the Revolving Period, the Issuer may periodically upsize the Series 2024-1 Notes, up to a maximum amount of $500 million, as long as certain conditions are met, including receipt of Rating Agency Confirmation.
The transaction features a revolving period (the “Revolving Period”), which will end on the earlier of (i) the close of business on June 30, 2026, approximately 24 months after the initial closing date and (ii) the date on which a Rapid Amortization Event has occurred. During the Revolving Period, the Seller will transfer additional Receivables to the Issuer, which will purchase such additional Receivables so long as (a) the Issuer and the Receivables satisfy all conditions set forth in the transaction documents and (b) a Rapid Amortization Event has not occurred and is not continuing. The transaction includes eligibility criteria and concentration limits for the issuer collateral pool.
Credit enhancement will consist of overcollateralization, subordination (except for the Class E Notes), excess spread, a reserve account (funded at closing) and the excess funding account.
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