First Help Financial is preparing to sell $326.8 million in asset-backed securities (ABS), backed by a pool of subprime automobile loan contracts secured primarily by used automobiles including light-duty trucks and vans, through the FHF Issuer Trust 2026-1.
Known as FHF 2026-1, the rule 144A deal will close on April 28, according to Morningstar DBRS. It will issue six classes of notes that will repay noteholders on the 15th of every month, DBRS said.
The notes have final scheduled distribution dates of May 17, 2027 and Sept. 16, 2030 on classes A1 and A2, respectively. Classes B, C and D have final payment dates of Feb. 17, 2032 and the class E notes have a final payment date of May 15, 2034, DBRS said.
Capital enhancement in FHF 2026-1's capital structure includes overcollateralization, subordination, a reserve fund and an available excess spread, the rating agency said.
The capital structure includes initial hard credit enhancement totaling 35.55% on the classes A1 and A2. Initial credit enhancement levels on classes B, C, D and E are 28.85%, 22.30%, 12.40% and 7.60%.
The structure also includes overcollateralization and a reserve account representing 6.60% and 1.00% of the note balance.
Analysts expect the collateral pool to be composed of receivables primarily from franchise dealers that offer indirect financing to consumers often overlooked by traditional financing sources such as banks, credit unions and captive auto finance companies, DBRS said.
FHF's borrower base are considered non-prime for a number of reasons, which include having a limited credit history, lacking a credit score or earn a lot of their income from cash transactions, the rating agency said.
The pool of receivables finance and refinance new and used vehicles, DBRS said. It saw a dramatic increase in yearly origination volume beginning in 2020 and lasting through 2024, when totals went from a little over $100 million to about $820 million, DBRS said.
As of Feb. 28, 2026, FHF serviced a portfolio of about 58,570 receivables, with an aggregate outstanding balance of about $1.5 billion, DBRS said.
DBRS assigns ratings of R1 and AAA to classes A1 and A2, respectively; AA and A to classes B and C; and BBB and BB to classes D and E, DBRS said.
