Back after three years since its last issuance, the Avant Credit Card Master Trust is preparing to issue $450 million in notes secured by revenue from a pool of credit cardholder payments.
Based in Chicago, Avant extends unsecured consumer loans and credit cards to non-prime consumers, according to ratings analysts at Kroll Bond Rating Agency (KBRA). As of the information date, the assets in the Master Trust had an average active credit line of $1,086, with an average balance of $794, and an average usage rate of 63%, the rating agency said.
Since July 21, 2021, the cutoff date before its last deal, Avant's active credit card accounts increased 388%, to its current 1 million accounts, according to KBRA. In other changes, Avant tightened to correct some deterioration in portfolio performances. In conjunction with this, the company increased the annual membership fee thresholds to increase both gross and net portfolio yields, KBRA said.
The current deal, AVCCT, 2024-1, will issue notes through five tranches of classes A, B, C D and E notes, the rating agency said. Aset Securitization Report's deal database expects a yield of 8.96% on the notes rated AA-, with an average life of 3.1 years. Yields will range from that rate to 6.31% on the B-rated notes, with a 1.7-year average life. All of the notes are benchmarked to the three-month Secured Overnight Financing Rate (SOFR), according to the database.
The transaction is slated to close on September 17, and KBRA says all the notes have a legal final maturity date of April 15, 2030.
As of the deal's Information Date, receivables in the master trust had a non-zero weighted average (WA) FICO score of 631, KBRA said. Also on a WA basis, the accounts have a seasoning of 27.7 months, and an interest rate of 31.4%.
The deal structure includes overcollateralization, a senior-subordinate repayment structure, a cash reserve account and excess spread of 21.16%, according to KBRA.
KBRA assigns ratings of AA- to the class A notes and A- to the class B notes. Classes C, D and E received ratings of BBB-; BB- and B.
