J.G. Wentworth is in the market with a $244 million structured settlement securitization deal.
The deal, J.G. Wentworth XXIII LLC, will issue two tranches of fixed rate notes that have been rated by Moody's Investors Service respectively, 'Aaa' and 'Baa2'.
The Issuer's assets will include court ordered structured settlements (approximately 94.6% of the present value of the receivables), annuity receivables (approximately 5.4% of the present value of the receivables) (together the receivables) and approximately $60.9 million, which will be used to purchase 25% of the net present value of the total receivables, deposited into the prefunding account.
The receivables were originated by J.G. Wentworth Origination LLC (J.G. Wentworth).
According to Moody's, Wentworth's originated court ordered structured settlements receivables have experienced very low losses, totaling less than 0.11% cumulatively since 2002.
This will be the second J.G. Wentworth transaction that utilizes a prefunding account. Amounts on deposit in the prefunding account may be used within a prefunding period of ninety days after closing to acquire additional receivables.
Off the run asset classes, such as structured settlements, have gained more credibility in the wake of the financial crisis. The deals, while trickier to set up, offer investors good yield and sound performance.
Peachtree Settlement Funding at the end of last year closed a $106 million placement of bonds backed by structured settlements. The placement was substantially over-subscribed, thus resulting in very attractive pricing for the organization.
One market player said that demand for even such off-the-run asset classes highlights that liquidity has returned to the esoteric ABS sector.