J.G. Wentworth has completed a $265 million securitization of payment rights under structured settlement and fixed-annuity purchase contracts.
J.G. Wentworth was the first issuer to securitize structured settlement payment streams in the asset-backed markets in 1997. Since then, the company has issued 23 securitizations backed by structured settlement and fixed-annuity receivables totaling nearly $3 billion.
The latest deal consisted of two issued classes of notes: $226 million of class A notes rated 'Aaa' by Moody’s Investors Service and 'AAA' by DBRS and $21 million of class B notes rated 'Baa2' by Moody’s and 'A' by DBRS; as well as an additional residual class of $18 million which was retained by the issuer. UBS Investment Bank and Jefferies & Company acted as co-lead arrangers and UBS Investment Bank as sole bookrunner.
“This first securitization in 2011 was the largest-to-date in the structured settlement industry," said J.G. Wentworth Chief Investment Officer, Stefano Sola. "J.G. Wentworth is committed to creating a liquid market for structured settlement and annuity backed notes through the continued access to the capital markets with benchmark deals. Our established securitization program and continued access to the capital markets underlines our commitment to this growing and diversified investor pool by delivering a consistent flow of product.”
Sola added that the consistent demand from insurance companies and money managers highlights the strength of this asset class within the broader asset backed market. “We structured this transaction with a 25% pre-funding account," he said. "The driver behind this decision was the underlying investor appetite and demand for long term access to strong, consistent and predictable cash flows.”