Second consumer loans will collateralize the Mariner Finance Issuance Trust 2021-B, as the trust issues $325 million in asset-backed securities (ABS), after previously issuing six public deals, and one private securitization since 2017.
Mariner Finance, a subsidiary of MF Raven Holdings, Inc., is sponsoring the deal, which is secured by secured and unsecured, fixed-rate, non-revolving personal loans that Mariner had originated through a network of about 484 branches across 25 states, according to Kroll Bond Rating Agency.
Over time, the MFIT securitizations have been getting larger in dollar volume, pricing at tighter spreads, and benefiting from more subordination. With five classes of notes, three of them senior, MFIT 2021-B is one of the largest issuances from the platform since MFIT 2017-A, according to Finsight.
Closing slated for November 4, and the ‘AAA’ rated senior notes are expected to price at around 77 basis points over swaps, compared with the 90 basis point spread that the ‘AAA’ notes achieved from the MFIT 2021-A series, according to Finsight.
It is also the tightest pricing that the senior notes have seen since the MFIT 2017-A deal, which came in at 200 basis points over swaps, in a deal with just three tranches.
Wells Fargo Securities is the structuring lead on the deal, returning to that role for the first time since November 2018, with BMO Capital Markets and Goldman Sachs Group acting as joint leads, according to Finsight.
Wells Fargo Bank plays several key roles on the deal, including indenture trustee, back-up servicer, depositor loan trustee, note register and issuer loan trustee, according to KBRA.
S&P Global Ratings notes that classes A, B, C, D and E notes will have credit support of 61.3%, 53.7%, 48.8%, 43.0% and 35.5%, respectively, in the form of subordination, overcollateralization, a reserve account and excess spread. The rating agency set its worst-case, weighted average, base-case loss assumption at 20.8%.
The COVID-19 pandemic prompted Mariner to tighten its underwriting and enhanced servicing procedures, S&P said. Mariner eliminated loans to lower-credit grade new borrowers, and reduced advances to that cohort, too.
During the COVID-19 economic dip, Mariner introduced new, reduced-payment deferral options to borrowers who had been negatively impacted. Deferral levels peaked in April 2020, and have fallen off since then and returned to historic levels, S&P said.
Both KBRA and S&P expect to assign ‘AAA’ ratings to the $206 million class A notes, through ‘BB-’ on the $35.5 million class E notes.
