aJ.G. Wentworth is marketing $155 million of securities backed primarily by structured settlement payments.
Most of the pool (91.8%) consists of court-ordered structured settlements related to personal injury; 4.2% is related to annuities and around 4% to lotteries. The contracts collateralizing the issuer’s Series 2015-2 securitization are primarily originated by the J.G. Wentworth and Peachtree Financial Solutions companies. The issuer sold $214 million of securities backed by the same asset class in March via the 2015-1 transaction.
Moody’s Investor Service stated that the transaction benefits from the diversity of highly rated insurance companies making the settlement payments. Approximately 78% of these companies have insurance financial strength ratings of A3’ or higher.
However, 8.61% of the receivables are exposed to Genworth Holdings, which Moody’s downgraded to 'Baa1' on Feb. 11. The exposure of the pool to a lower rated entity is minimal, and partially mitigated by the adequate credit enhancement in the structure, however.
Moody’s has assigned a preliminary'Aaa' to $139 million of class A notes, due March 2058; and 'Baa2' to $16 million of class B notes due March 2060. The Class A Notes benefit from 15.25% subordination in the form of the Class B notes and issuer interest; that's up from 14.75% subordination for the sponsor’s 2015-1 transaction.
The deal is partially prefunded: only 60% of the assets will be purchased at closing; the remaining 40% of proceeds from the deal will be put to work within 90 days of closing. JG Wentworth may use a portion of the prefunding account to purchase additional lottery receivables, potentially boosting the concentration of this type of asset as high as 5.50%.
Barclays Capital, Credit Suisse, Natixis Securities Americas and Deutsche Bank are the initial purchasers of the notes.
