Foundation Finance Co., which underwrites and acquires installment loans issued by third-party home improvement contractors, is launching it’s first-ever asset-backed collateralization sized at $178.15 million.

The interest rate on Foundation Finance Trust 2016-1 is to be determined on both the Class A series of notes totaling $157.55 million and the Class B notes sized at $20.6 million. The Class A notes are supported by 24% enhancement, and have a preliminary ‘A’ structured finance rating by Kroll Bond Rating Agency. The B notes, with 14% enhancement, carry an ‘A-’ rating. Credit enhancement includes a 13.5% initial overcollateralization pool and a 0.5% reserve fund.

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