Oportun, a nonbank lender that targets Latino consumers, has completed its fourth securitization and the first one with a credit rating, from Kroll Bond Rating Agency.
There are a total of $125 million notes, including $102.94 million of class A notes initial credit enhancement of 30% that are rated A’ by KBRA and $22.06 million of class B notes with credit enhancement of 15% that are rated BBB.’
The notes have a blended coupon of 3.4% according to a company spokesman; that is down from 4% on the previous deal completed in February, which was unrated.
Oportun focuses on lending to Hispanic consumers who have limited or no credit history. Approximately 42% of new customers have no credit score. Over the past nine years, it has developed a proprietary risk management system to underwrite the credit quality of these obligors.
The latest transaction includes a two year revolving period during which additional collateral may be funded in the transaction so long as it complies with certain eligibility criteria.
The servicer is PF Servicing and the back-up servicer is Systems & Services Technologies.
In its presale report, KBRA notes that Oportun has a decentralized branch network and currently operates 150 branch locations. This branch network has been important to Oportun’s growth and success as it has been able to offer convenient lending and payment options to customers in their communities. However, KBRA believes that the decentralized network may present a challenge in the event of a servicing transfer.
Oportun operates exclusively in California, Texas and Illinois but has recently expanded to Utah and plans to expand into Nevada in by the end of 2015. The initial collateral in the Oportun 2015-1 transaction has the following state concentrations: California (81.42%), Texas (14.91%) and Illinois (3.67%), according to Kroll.
The Oportun 2015-B statistical pool has slightly lower weighted average VantageScore, a smaller average loan size and similar weighted average coupon than in the Progreso 2015-A transaction. The deal has a higher percentage of renewal loans and slightly longer weighted average seasoning than the prior transaction. The credit enhancement is the same as the last two transactions.
Oportun issued its first securitization in June 2013.