J.G. Wentworth is sponsoring its second securitization of the year in a $140.5 million bond sale backed by receivables from term structured-settlement receivables.
J.G. Wentworth XXXIX LLC Series 2017-2 includes a $125.3 million Class A series of notes carrying preliminary AAA ratings from Moody’s Investors Service and DBRS, according to pre-sale reports published Tuesday.
The Class A notes benefit from 16.75% credit support, including 10.25% subordination of the $15.2 million in Class B notes (rated Baa2 by Moody’s, BBB by DBRS), 5.5% overcollateralization and a 1% cash reserve account.
DBRS says the transaction is “broadly similar” to previous asset-backed deals of court-approved structured settlement transfers, which are predominantly from personal injury lawsuits (95.5% of the collateral pool). The new transaction involves 1,118 accounts.
The receivables also come from annuities (3.17%) and lottery winnings (0.88%) acquired and serviced by Wentworth and its subsidiaries.
The diverse obligor pool of insurance carriers paying the receivables (such as American General Life, Metropolitan Life Insurance Co. and Prudential Life) are highly rated, with a weighted average credit rating of A, according to DBRS. Nearly 85% of the pool is backed by carries with at least an A rating, and 93% have at least a BBB rating.
Moody’s says it is Wentworth’s 46th term securitization since 1977.
The transaction includes a substantial $70.3 million prefunding account, or 50% of the bonds issued, which will allow Wentworth to add additional receivables to the pool for up to 90 business days after the transaction closes.