OneMain Financial, the consumer lending business owned by Citigroup, is back with its third securitization of the year. It is backed by a portfolio of non-prime and subprime personal loans, according to DBRS.
The sponsor plans to offer $292 million of securities via One Main Financial Issuance Trust 2015-3. DBRS assigned a preliminary rating of 'AA' to the class A notes; 'BBB' to the class B notes; and 'BB' to the class C notes. All three tranches mature in November 2028.
Credit enhancement has increased across all notes compared with the previous transaction (2015-2), which priced in May. Credit support on the class A notes increased to 36.40% from 34.00%; class B increased to 28.20% from 24.80%; class C increased to 20.00% from 17.00%.
Loans in the collateral pool have a weighted average remaining term of 48 months and a weighted average FICO of 640.
Five months ago, Citigroup announced that it had sold the consuming lending business to Springleaf Holdings for $4.25 billion; but regulatory concerns over the proposed acquisition have delayed the close of the deal. That means that the sponsor will execute its next securitization as a subsidiary of Citigroup. Citigroup currently provides certain functional support to OneMain (such as legal, finance, information technology and compliance); once the sale to Springleaf is completed, Citigroup and OneMain will enter into a transition services agreement to continue the provision of such services, as needed.
Once the deal goes through, Springleaf plans to consolidate approximately 200 Springleaf Holdings and OneMain branches in the middle of 2016.
OneMain offers secured and unsecured personal consumer loans through approximately 1,139 branches in 43 states. As of June 30, 2015 the sponsor's loan portfolio included approximately 1.3 million loans, balance of $8.2 billion and average weighted annual percentage interest rate of 25.60%