Affirm is coming to the securitization market to raise $548.9 million in securitized bonds, backed by a static pool of interest-bearing, point-of-sale unsecured consumer loans.
The transaction, Affirm Asset Securitization Trust 2026-X1, will sell the notes through four tranches of class A, B, C and D notes, all of which have a legal final maturity date of April 15, 2031, according to Fitch Ratings.
Notes will benefit from credit enhancement levels of 30.24%, 22.24%, 14.48% and 6.24%, on classes A, B, C and D, respectively, and the class A notes will issue the bulk of the notes, $408.8 million.
The deal is slated to close around May 19, 2026, according to Morningstar DBRS, which also assessed to notes. Morgan Stanley is the lead underwriter, according to Fitch.
Notes benefit from subordination, overcollateralization, excess spread and a reserve account, the rating agencies said.
Affirm originated all 627,108 loans in the pool, either through its subsidiary ALS or through partners, CrossRiver Bank, Celtic Bank and Lead Bank, chartered in New Jersey, Utah and Missouri, respectively.
Fitch noted that the deal features a principal acceleration trigger. If breached, the transaction will divert all additional funds to paying down the principal on the notes until they are fully paid off. Certificate holders, however, will receive no payments until that situation is resolved.
Fitch analysts noted that to date no Affirm securitization had breached a trigger.
The loans have an average balance of $1,110, and on a weighted average (WA) basis the loans have original terms of 24 months, with 20 remaining, and an interest rate of 28.3%. Borrowers have a WA credit score of 681, according to DBRS.
At the April 9 cutoff date, the collateral pool had a weighted average (WA) seasoning of three months, according to Fitch.
Fitch assigns AAA, AA and A to classes A, B and C notes. DBRS' ratings are (P) AAA (sf) on class A; (P) AA (high) (sf) to the class B notes; (P) A (high) (sf) to the class C notes; and (P) BBB (high) (sf) to the class D notes.
