Finance

The rating agency said 82 of the 114 loans, representing 76.4% of the portfolio's value, have final balloon payments.

Southern Auto Finance uses a heavily automated origination process that puts applicants through several rounds of vetting, including income and employment verification.

At any point during the revolving period, the issuer might upsize the current notes to a $500 million limit.

The deal taps into insurers' growing demand for long-dated private credit investments. More than a dozen investors, are set to participate in the transaction.

The collateral's annual percentage rate, loan-to-value and debt-to-income rates all decreased compared to the PART 2024-2 transaction.

Among its structural strengths, DEFT 2025-1 includes a non-declining reserve account representing 1.0% of the pool balance.

Yields, are expected to come in ranging from 4.4% on the class A notes, to 4.5% on the class A4 notes.

The move comes as bonds Saks sold to finance its $2.7 billion acquisition last year have lost more than a third of their value since they were issued in December.

The lender's parent also said it is actively in preparation to move forward on plans to unlock equity value in 2025, with a Newrez spinoff among its options.

A vast majority of borrowers have either graduated from one of MPOWER's eligible graduate degree programs in science, technology, engineering and math (STEM) or business.