Novation Settlement Solutions (formerly known as Novation Capital) plans to issue $40 million in securities backed by a portfolio of receivables related to settlements of legal claims, according to a DBRS press release.
The deal, NV Funding LLC Series 2014-A, is structured with $40 million of class A, fixed-rate notes that have been assigned a preliminary ratings of A’.
The issuer was last in market in May 2013 with a $28 million deal. Novation Settlement Solutions sold the deal under Rule 144A to a single investor in 2010 that was structured as a single-A-rated tranche by DBRS and carried a subordinated portion.
A structured settlement is a financial or insurance arrangement whereby a claimant agrees to resolve a personal injury claim by receiving periodic payments on an agreed schedule rather than as a lump sum. Claimants who subsequently decide they want a lump sum may sell the settlemen to a third party such as Novation, which then securitizes the receivables.