KBRA Assigns Preliminary Ratings to Oportun Issuance Trust 2024-2
15 Aug 2024 | New York
KBRA assigns preliminary ratings to four classes of notes issued by Oportun Issuance Trust 2024-2 (“Oportun 2024-2”), a $223.25 million consumer loan ABS transaction. Oportun 2024-2 is an amortizing ABS securitization collateralized by a discrete pool of unsecured and secured consumer installment loans originated by Oportun Financial Corporation (“Oportun” or the “Company”).
Oportun is a publicly traded, California based consumer finance company listed on the NASDAQ that provides financial services, including both unsecured and secured personal installment loans, to borrowers who do not have a credit score or who may have a limited credit history. The Company has been issuing unsecured consumer loans for 17 years and began offering a secured personal installment loan, which are partially secured by an automobile title, in 2020.
Oportun 2024-2 has initial credit enhancement levels ranging from 40.23% for the Class A notes to 5.48% for the Class D notes. Credit enhancement consists of overcollateralization, excess spread, a non-declining cash reserve account and subordination (in the case of the Class A, Class B and Class C notes). As of the Statistical Cutoff Date, the collateral pool is $168 million, with secured personal loans comprising approximately 7.4% of the pool. The notes are sized based on an anticipated initial pool totaling $235 million, which is expected to have similar characteristics to the Statistical Cutoff Date pool.
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 Oportun, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing
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