GoodLeap, which offers home improvement loans that finance projects, including LED lighting, home performance upgrades and water efficiency, is preparing to raise $354.7 million in asset-backed securities (ABS) from a portfolio of the loans.
GoodLeap Home Improvement Solutions Trust, series 2025-2, will issue notes through three tranches of A, B and C notes, which all have a legal final maturity date of June 20, 2049, according to Kroll Bond Rating Agency. The notes have initial credit enhancement amounting to 19.32%, 13.11% and 4.95% of classes A, B and C.
Goldman Sachs, BofA Securities, Citigroup Global Markets and CIBC World Markets are initial note purchasers, KBRA said.
It appears that GoodLeap's notes will be repaid on a hybrid sequential, pro rata basis, where the class A notes will receive enough principal payments to reach its specified class A overcollateralization amount of the outstanding pool balance. If the class A notes maintain the overcollateralization amount, the class B and C notes can receive their principal payments, KBRA said.
For the overall deal, the target overcollateralization amount is 5.00% of 95.00% of the current pool balance.
The structure includes a non-declining reserve account, established with 0.50% of the initial outstanding balance at closing, KBRA said.
The deal also includes a cumulative default trigger that, if in effect, will revert the GDLP 2025-2 deal to a sequential payment priority. Also, while this trigger event is in effect, interest on the classes B and C notes will be subordinated to the principal payment of the class A notes.
In terms of the collateral, the pool contains 31,796 loans, and they have an average balance of $12,296.
The portfolio appears to be geographically diverse, with California accounting for 13.20% of the properties that received financing, and Texas and Florida account for 12.33% and 9.91% of the pool, respectively.
KBRA assigns A-, BBB and BB to classes A, B and C, respectively.
