Figure Lending is sponsoring a $383.4 million securitization of home equity line of credit contracts, which were extended to prime and near-prime borrowers.
The FIGRE Trust 2026-HE4 will sell the notes through seven tranches of class A, B, C, D, E, F and G notes, according to Morningstar DBRS. The pool is composed of recently originated first- and junior-lien revolving home equity lines of credit, the rating agency said.
The notes will repay investors following a pro rata cash flow structure that is also subject to a credit event. The latter is based on performance triggers based on parameters such as cumulative losses and delinquencies, DBRS said.
Similar to previous transactions, FIGRE Trust uses a delinquency trigger, and a cumulative loss trigger. The delinquency trigger will be applied on or after the 12th payment date, the rating agency said.
Unlike some of FIGRE Trust's previous securitizations, there is no performance trigger related to the net weighted average (WA) coupon rate, DBRS said.
The rating agency notes that Figure Lending and other white label origination partners originated the loans, while also noting that CrossCountry and Lakeview account for 20.4% and 20.0% of the underlying loan pool. Figure Wholesale accounts for 16.0% of the pool, while other originators represent no more than 10% of the balance of home loans, DBRS said.
With an expected closing date of May 5, the notes have a stated final maturity date of May 2056, DBRS said.
The A, B, C, D, E and F classes of notes benefit from credit enhancement levels of 35.9%, 28.4%, 17.7%, 11.6%, 4.9% and 2.00%, respectively.
Some 4,962 loans will secure the notes, DBRS said, adding that they have a total current credit limit of $408.8 million, as of the March 31 cutoff date.
DBRS applies ratings of AAA, AA and A to classes A, B and C, respectively, and BBB, BB and B to classes D, E and F, respectively.
