Springleaf Financial priced an additional $559 million of its personal consumer loans bond based on investor demand.
The deal was originally sized at $601 million but at pricing $1.16 billion of securities backed by the personal consumer loans were sold, according to a pricing document.
Springleaf’s deal called, SLFT 2015-A, priced the 3.5-year, class A notes at 182.5 basis points over interpolated swaps; the notes yielded 3.2%.
The 4.34-year, class B notes were sold at a spread of 210 basis points over interpolated swaps, yielding 3.65% and the 4.58-year class C notes priced at 350 basis points, yielding 5.1%. The class D notes, structured with a weighted average life of 4.81 years, priced at 475 basis points over interpolated swaps and yield 6.4%.
Standard & Poor’s, Kroll Bond Rating Agency and DBRS expect to rate the senior notes A+’/ AA’/ AA’. The junior tranches will be rated BBB’/ A’/ A’ , BB’/ BBB’/ BBB’ and B’/ BB’/ BB’.
Although the S&P ratings on the senior notes are two notches below the DBRS rating, S&P ratings on this deal are a notch above where it rated comparable notes in the issuer’s previous transaction, SLFT 2014-A. This is because the current deal has increased the hard credit enhancement on the notes to 26.5% from 23.4%.
Barclays, Citigroup and Natixis are the lead managers.
The underlying personal consumer loans are installment loans with three- to four-year original terms with a fixed interest rate that varies between 18% to 36% and sizes of up to $10,000. According to the S&P presale, remaining loan terms for the current deal increased to a weighted average 42 months from 36 months in the issuer’s 2014 deal. Also up in this deal is the share of unsecured loans in the pool, reaching 25% from 20% in the 2014 transaction.
The issuer operates through a network of nearly 831 branches in 26 states as of Sept. 30, 2014. The branches operate as servicing and collection centers for loans that are originated within the branches. Springleaf relies primarily on a decentralized branch network to originate and service its portfolio of personal consumer loans. However last year the issuer began centralizing all loans that were three or more payments past due to a servicing center located in London, KY, which was acquired from HSBC in 2013, according to the S&P presale.