Freedom Consumer Credit Fund returned to the securitization market recently to sponsor a $191.1 million, Rule 144A securitization of unsecured consumer loans originated through the Achieve online platform.
Formerly known as FreedomPlus, Achieve underwrote the loans using its proprietary algorithms, and a manual review of borrowers' creditworthiness, the company said in a statement about the deal. Its banking partners Cross River Bank and Pathward originated the loans, the company said. Most of its customers use the prices to consolidate debt and lower interest rates.
Known as ACHV ABS Trust 2023-2PL, the securitization issued notes through a senior-subordinate structure that will repay the notes sequentially, according to the company. The notes gets additional credit support from an initial overcollateralization (OC) of around 18.5%, which will increase to target OC 28.1% of the current collateral balance. Also, a target reserve fund of 1.00% and excess spread of 10.1% provide additional credit enhancement, according to the company. After its April 13 close, the deal brought Freedom Consumer Credit Fund's cumulative issuances across its securitization portfolios to $4.8 billion, according to the company.
Four classes of fixed-rate notes are secured by 12,778 unsecured consumer loans, the company said.
Atlas SP Partners served as structuring agent and joint bookrunner. Trust Securities and Jefferies each initially purchased the rated notes and served as joint bookrunner. CRB Securities co-managed the rated notes, the company said.
Two rating agencies, Kroll Bond Rating Agency and DBRS Morningstar, assigned ratings to the notes. KBRA assigned 'AAA' to the class A notes; 'AA-' to the class B notes; 'A-' to class C and 'BBB-' to the class D notes. For its part DBRS assigned 'AAA', 'AA', and 'A' to classes A, B and C, respectively, although it did not assign ratings to the class D notes.
The notes have a legal final maturity of May 20, 2030.
