One Main Finance's latest sponsored securitization will sell $750 million in notes, secured by the smallest pool of personal loans by loan count, and the shortest revolving period since April 2024.
OneMain Financial Issuance Trust 2062, also known as OMFIT 2062-2, will sell the notes backed by a pool of non-revolving personal loans primarily secured by automobiles, but which could also be collateralized by other titled personal property, including boats, trailers and other hard assets, according to analysts at Kroll Bond Rating Agency.
The deal offers the ABS through four tranches of A, B, C and D class notes, which benefit from initial credit enhancement levels of 32.75%, 27.85%, 21.75% and 10.45%, respectively, and which all have a legal final maturity date of Jan. 14, 2038, KBRA said.
Aside from subordination, derived from a sequential repayment structure, OMFIT 2026-2's structure includes several layers of credit protection, including overcollateralization, a cash reserve account and excess spread.
Initial overcollateralization will represent 10.0% of the pool balance. Also, a cash reserve account will be funded at closing, equaling 0.50% of the note balance or 0.45% of the initial pool balance.
Excess spread on the notes equals 15.25%, KBRA said.
The deal has a two-year revolving period, but certain conditions, including the average of three consecutive monthly net loss percentages exceeding 17.00%, could end the revolving period and trigger early amortization, according to KBRA.
If the trigger conditions are cured, the revolving period may be reinstated, the rating agency said.
The loans have an average balance of $9,592, with a weighted average (WA) interest rate of 24.75%, and a WA original term of 58 months. Borrowers have an average FICO score of 639, KBRA said.
Geographically, the pool appears to be more diversified. Texas, California and Florida all account for a less than 10% concentration of the pool, with 9.78%, 7.23% and 6.82% respectively.
KBRA assigns ratings of AAA, AA, A and BBB- to classes A,B, C and D, respectively.
