Point-of-sale, unsecured consumer loans will secure $735.6 million in asset-backed securities (ABS) from the Affirm Asset Securitization Trust, series 2024-X2.
Scheduled for a December 3 closing, the transaction will sell notes through four tranches of class A, B, C and D notes, according to ratings analysts at Morningstar | DBRS. The transaction will begin repaying notes on Jan. 15, 2025, and has a final scheduled payment date of Dec. 17, 2029, the rating agency said.
Asset Securitization Report's deal database says expected yields on the notes range from 5.2% on the AAA-rated tranche to 6.1% on the BBB-rated tranche. Yields on the AAA notes are slightly tighter than the 5.1% seen on the Affirm Asset Securitization Trust, 2024-B series, according to the database.
Yields on the BBB notes, which came in at around 7.4% on the 2024-B transaction, are significantly tighter, according to the database.
Barclays, Citigroup Global Markets, Deutsche Bank Securities and Morgan Stanley.
DBRS assigns ratings of AAA, AA, A and BBB to the A, B, C and D notes, respectively.
The notes receive credit enhancement through a fully funded reserve account with an amount equaling 0.25% of the initial outstanding amount and excess spread. Affirm Asset also benefits from specified overcollateralization of either $3.6 million or 6.3% of the outstanding pool balance, DBRS said. There is also subordination derived from a sequential-pay structure, the rating agency said.
San Francisco-based Affirm maintains an omnichannel network of 320,000 merchants that allow consumers to pay for transactions through installment plans, commonly known as buy-now, pay-later loans. More than 19.5 million active consumers use its services, DBRS said. The loans are fixed-rate, non-revolving, unsecured and fully amortizing.
The current collateralization pool contains loans originated by Cross River Bank, Celtic Bank, Affirm Loan Services and Lead Bank, the rating agency said. Aside from sponsoring the deal, Affirm is the seller, custodian, administrator and will service the notes, the rating agency said.
