IPFS Corp. plans to issue $376 million of insurance premium finance asset backed notes.
Moody's Investors Service has assigned Aaa’ ratings to Series 2014-A notes. to be issued by PFS Financing Corp. The issuer is a wholly owned subsidiary of IPFS Corp. IPFS acts as the servicer on the deal.
IPFS has been a regular issuer in the securitization market since the 1990s. According to the presale report the latest deal is one of several series of notes outstanding under the issuer’s master trust structure.
The deal is backed by short-duration loans made to commercial insurance buyers to purchase property and casualty insurance policies with a typical duration of one-year.
Property and casualty insurance policies for businesses typically require a full, one-year premium to be paid at or near the beginning of the policy period. The premium finance loan enables the insurance policy holder to spread payments over the course of the policy instead of paying the entire premium up front.
The loans are secured by the right to receive any unearned premium balance that the insurance carrier owes if the borrower fails to pay the amounts due on the premium finance loans and the underlying policies are canceled.
IPFS (formerly known as Premium Financing Specialists, Inc.) was formed in 1977 and offers premium financing services through a network of approximately 16,250 insurance agencies. As of Oct. 31, 2013, the company had approximately $2.3 billion outstanding receivables, according to the presale report.