In a follow up to its securitization last year, the Mission Lane Credit Card Master Trust, Series 2022-A, will issue $200 million in asset-backed securities (ABS).
A higher average receivables balance, collateral annual percentage rate and a lower weighted average FICO score will distinguish the deal from its predecessor.
Mission Lane, founded in 2018, offers financial products to traditionally underserved customers who are working to build or rebuild their credit, according to a pre-sale report from Kroll Bond Rating Agency. The collateral for this current deal consists of 2.1 million accounts, including those that have been closed or charged off.
The transaction, known at MLANE 2022-A, appears to be just the second one on record from the program. Mission Lane will issue the notes through three classes. KBRA expects to assign ratings of ‘A’ to the $156.5 million, class A notes; ‘BBB’ to the $23.9 million, class B notes; and ‘BB’ to the $19.7 million, C notes.
The accounts in the collateral for MLANE, 2022-A, have an APR of 28.3%, an average balance of $650, and a weighted average (WA) FICO score of 618. This compares with an APR of 27.6%, an average receivables balance of $512 and a WA FICO score of 623 for MLANE 2021-A.
In another change from the previous deal, MLANE 2022-A’s collateral includes loans originated through the company’s pre-qualification channel, which it launched in Q4 2021. This pre-qualification channel enables a prospective customer to apply directly for one of the company’s financial products through the company’s Website.
As for the notes issued from the current deal, they benefit from sufficient credit enhancement levels. Initially, MLANE 2022-A has a reserve account of 0.0%, and will be funded to a target of the deal’s collateral amount if the three-month average excess spread falls below certain thresholds.
If the three-month average excess spread is less than or equal to 4.0%, the reserve target will be 1%; if excess spread is less than or equal to 3.0%, the reserve target will be 2.0%; and if excess spread is less than or equal to 2.5%, the reserve target will be 3.0%.
