Lendmark Financial Services is preparing to sponsor a $300 million securitization of revenue from personal loans, selling the asset-backed securities (ABS) through the Lendmark Funding Trust, series 2026-1.
With a closing date set for May 6, the transaction will issue the notes through four tranches of class A, B, C and D notes, according to ratings analysts at Morningstar DBRS and S&P Global Ratings.
The deal will repay the debt on the fixed-rate notes through a senior-subordinate structure, according to DBRS and S&P. All the classes of notes have a legal final maturity date of Nov. 20, 2035, S&P said. The class A notes will issue the bulk of the date, $219.62 million, according to the rating agency.
SMBC Nikko Securities America is the lead underwriter on the deal, according to S&P.
There are a couple of minor differences from the Lendmark, series 2026-1, beginning with the weighted average, base-case annualized gross loss that declined from 11.78%, from 11.86%. S&P said this came about due to minor changes in its assumptions of pool segment defaults.
Lendmark 2026-2 requires an overcollateralization target amount of 8.05% of the initial pool amount—up from the initial amount at 7.45% at closing—an increase from the 7.75% seen on the 2026-1 series, S&P said.
Classes A, B, C and D benefit from about 32.75%, 25.60%, 17.25% and 7.95%, respectively, according to S&P.
The deal structure includes a fully funded, non-amortizing reserve account of $1.62 million, or 0.50% of the initial loan pool, according to S&P.
S&P assigns ratings of AAA, AA, A and BBB to classes A, B, C and D, respectively, and DBRS assigns AAA, AA, A, and BBB to the A, B, C and D classes, respectively.
