HFG Healthco-4 an affiliate of Healthcare Finance Group is securitizing $100 million of healthcare receivables in a deal issued from its master trust program.
Moody's Investors Service has assigned the deal's, Series 2011-1, class A notes a provisional rating of 'Aa2(sf)'. Collateral for Series 2011-1 is shared with the other series of the notes issued under the master trust indenture and consists of a pool of revolving asset-based loans secured by healthcare receivables and extended to healthcare-related providers, such as hospitals, nursing homes and pharmacy benefit managers, according to the Moody's presale report.
Series 2011-1 Class A is supported by the collateral and 6.50% subordination provided by the Series 2011-1 Class B notes. The Issuer is required to maintain an overall advance rate no greater than 90% and 86% of the expected net value of funded eligible receivables, in order to mitigate any potential loss at the borrower/provider level.
The transaction also benefits from an unconditional and irrevocable letter guaranty from a subsidiary of Morgan Stanley in support of HFG's roles as program manager and master servicer only which mitigates servicer operational risk.
