JG Wentworth is marketing $102.1 million of bonds backed by structured settlement payments; it’s the sponsors third transaction so far this year.
J.G. Wentworth XXXIV LLC Series 2015-3 is backed by a portfolio of mostly court-ordered structured settlement payments (93.19%), annuity receivables (4.37%) and lottery receivables (2.44%).
Moody's Investor Service and DBRS assigned preliminary ratings of 'Aaa'/ 'AAA' to $91.9 million of class A notes and 'Baa2'/'BBB' ratings to $10.2 million of class B notes. The class A notes mature on March 2070 and the class B notes mature March 2072.
The deal is also structured with an $8.5 million equity tranche.
The class B notes and equity tranche will provide 14.75% credit support for the class A notes. Credit support for the senior notes will increase over time as the class B notes will not receive any principal payments in the first four years after the closing date. The class B notes benefit from 5.50% subordination provided by the equity tranche.
JGW Management is the initial servicer of the deal and Portfolio Financial Servicing Company is the backup servicer.
Moody's noted in its presale report that the deal has high exposure to Genworth Holdings, a life insurance company, which this year saw its credit ratings downgraded by Moody's to 'Ba1' from 'Baa3'. Moody's downgrade the life insurer on Feb. 11, 2015. The outlook on Genworth’s ratings is negative.
Genworth is an obligor on 7.92% of the receivables pooled in J.G. Wentworth 2015-3. This high exposure to the weaker obligor is mitigated by the available credit enhancement, highly rated insurance obligor base, and strong historical performance of the pools, said Moody's.
Credit Suisse, Barclays, Natixis Securities Americas and Deutsche Bank are the initial purchasers of the notes.