Credit Suisse and Barclays are underwriting a $221 million structured settlements securitization for JG Wentworth.
Moody’s Investor Service has assigned preliminary rating to the deal, JGWPT XXXII, Series 2014-2. The capital structure will offer $196.8 million of class A notes, rated Aaa’; and $24.6 million of class B notes rated Baa2’.
The notes are backed by a pool of court-ordered transfers of structured settlement payments and lottery receivables along with a $66.4 million cash prefunding account for the purchase of additional receivables within 90 days of the transaction’s close. The prefunding account constitutes approximately 30% of the balance of the notes.
According to Moody’s the deal is structured similarly to the issuer’s previous transactions except that this one includes, for the first time since 2011, receivables where Executive Life Insurance Company of New York (ELNY) was the original obligor.
The obligations were assumed by Guaranty Association Benefits Company (GABC) under a court approved Restructuring Agreement in August 2013. GABC is a newly created not-for-profit insurance company formed by state life and health guaranty associations and funded with estate assets of ELNY, financial contributions from guaranty associations and additional support from certain life insurance companies.
The total scheduled payments from GABC are about $2.5 million ($1.7 million discounted at 5.5%) representing about 0.98% of the total cash flows (1.16% of discounted cash flows).
The first structured settlement ABS offering was completed in 1997 by J.G. Wentworth. It remains the largest purchaser of structured settlement rights and the most regular issuer of structured settlement-backed ABS.