Marlette Funding latest sponsored securitization will raise $321.2 million in asset-backed securities, funded by a pool of 'good egg' consumer loans, through the Marlette Funding Trust 2024-1.
A wholly owned subsidiary of Best Egg, Inc., Wilmington, Del.-based Marlette offers online personal loans under the Best Egg brand, according to ratings analysts at Kroll Bond Rating Agency. The deal will issue notes through four tranches of classes A, B, C and D notes, all of which have a July 17, 2034 legal final maturity date, KBRA said.
Initially, ratings analysts said, the A, B, C and D notes have credit enhancements of 50.52%, 31.32%, 23.88% and 14.46% respectively. As the notes amortize, the levels of credit enhancement—which is comprised of overcollateralization, subordination, a cash reserve and excess spread—will increase over time. Initially, overcollateralization represents 14.03% of the pool balance, increasing to a target of 17.48%. Cash reserves equal about 0.50% of the note balance as of the closing date. Excess spread, meanwhile, amounts to about 6.25%.
MFT 2024-1 is expected to close on June 28, according to Asset Securitization Report's deal database. According to the listing, the yields are expected to range from 6.0% on the AAA notes to 7.0% on the BBB- notes. Bank of America Merrill Lynch, Goldman Sachs, J.P.Morgan Securities and RBC Capital Markets are managers on the deal, the ASR database said.
The current pool includes personal loans originated under the Prime loans, where borrowers have an average income of about $130,000 and an average FICO score of 725. Fitch Ratings analysts says these loans make up a vast majority of the pool, at 86.3%. Best Egg Secured Loans which are secured by home fixtures, borrowers have an average income of about $130,000 and an average FICO score of 730; and accounts for 11.3% of the collateral pool. The High Yield Prime loans are offered to borrowers who would not qualify for the two former programs, and Fitch said those loans account for 2.41% of the pool.
Cross River Bank is the primary originator for all the Prime loans, while Blue Ridge Bank partnered with Marlette to originate 2.7% of the loans in the MFT 2024-1 deal.
Secured loans account for 11.3% of the MFT 2024-1 collateral pool, with 84-month terms that themselves represent 2.2% of the total collateral pool.
KBRA assigns ratings of AAA, AA-, A- and BBB- to classes A, B, C and D notes, respectively. Fitch assigns AAA, AA and A to the classes A, B and C notes.
