Finance

Alternative asset managers, emboldened by the boom, will continue buying life insurers or seek more partnerships with them as they hunt for more capital to feed their dedicated funds.

Excess cash flow will pay timely interest and protect against realized losses in the rated certificates before being paid out to the class X notes.

The deal also offers a subordination piece that represents 14% of the pool balance, helping to boost the credit to the notes.

Total delinquencies as a percentage of John Deere's managed portfolio was 3.06%, an increase since 2022. That aligns with the decline in corn and soy prices in the same period.

There is also a trigger embedded in the deal, attached to cumulative net losses that would set off a full turbo payment.

Servicers—Citadel, NewRez and Selene Finance—will not advance any delinquent principal and interest. Eventually, that should reduce loss severities to the deal.

Investment properties are the primary properties backing the collateral pool, at 80.3%, while second homes account for 19.7% of the pool.

Amortization will start after the deal's two-year revolving period, when the trust will deposit revenue including collections and upgrades into the acquisition account.

Affirm grade A loans account for 34.8% of the pool and have historically produced the lowest defaults in the sponsor's managed portfolios.

Tricon's pool had 49 vacant properties, which translated to a 3.4% vacancy rate in the pool, lower than the average 6.0% in KBRA's comparison set of 24 deals.