In its fifth securitization backed entirely by home improvement loans, GoodLeap Home Improvement Solutions Trust will raise $408.9 million from the capital markets, through the 2026-1 series of notes.
The supporting portfolio of loans will finance LED lighting, HVAC, windows and doors, generators and other improvements, according to Kroll Bond Rating Agency. Known as GDLP 2026-1, the deal will sell the asset-backed securities (ABS) through three tranches of notes, all of which have a legal final maturity date of Dec. 20, 2049.
The newest round of securitization increased its initial credit enhancement levels across the board, with the A-, BBB and BB- notes benefiting from levels of 21.89%, 1.89% and 5.74%, respectively, KBRA said.
GDLP's builds on a vertical risk retention structure that allocates 95.00% of the collateral balance to the noteholders and 5.00% to the retained interest holders. The class A notes will receive principal to funds its specified class A overcollateralization level of 24.92% out of the 95.00% of the outstanding pool balance.
If the class A notes stay at the overcollateralization level, principal can be paid to the class B and class C notes pro rata, according to KBRA.
Overall, the deal has a target overcollateralization amount of 5.76%, KBRA said. There is also a non-declining reserve account funded at closing and equaling 0.50% of the initial aggregate outstanding note balance.
The notes also benefit from gross annual excess spread of about 5.98% before losses.
A cumulative default trigger stipulates that the structure will revert to sequential payment priority where the class A notes receive principal until it is paid in full. After that, the class B and Class C notes start to receive principal under the same terms.
When the outstanding pool balance is less than, or equal to, 10% of the initial pool balance, GDLP will switch to sequential payment until the notes are paid in full, KBRA said.
In terms the collateral pool, GDLP contains 37,987 loans with an average current balance of $11,960, and an average interest rate of 12.56%. Also, borrowers have a FICO score of 757 on a weighted average (WA).
