First Help Financial's latest pool of subprime automobile loan contracts, primarily secured by used vehicles, will raise $272.7 million in asset-backed securities (ABS) through notes coming to market around August 25.
The transaction, FHF Issuer Trust, series 2026-2, will sell about seven tranches of notes, classes A through F, which will be prefunded in an amount of about 17% of the aggregate initial balance, up to about $50 million, according to Morningstar DBRS.
The deal has a prefunding period beginning on its closing date and ending no later than October 31, according to DBRS.
FHF Issuer Trust 2026-2's final distribution dates range from Sept. 15, 2027 on the class A1 notes through Jan. 16, 2034 on the class F notes, according to DBRS.
A sequential note structure confers subordination to the deal, according to the rating agency, with overcollateralization—initially 4.30%, with a target of 4.30%--excess spread of 7.80%, and a reserve fund equaling 1.00% of the aggregate balance, among its other structural features.
Franchise dealers originated virtually all the 6,183 loans in the pool, accounting for 91.36%, DBRS found. The loans have an average principal balance of $33,168, with a weighted average (WA) coupon of 19.00%.
DBRS assigns ratings of R1 to the A1 notes. After that, ratings range from (P) AAA (sf) on the A2 notes through (P) B (sf) on the class F notes, the rating agency said.
