A pool of non-revolving consumer loans will back $500 million in asset-backed securities (ABS), coming to the capital markets through the OneMain Financial Issuance Trust, series 2026-1.
The current transaction can reduce exposure to OneMain Financial's unsecured loan products, and a greater exposure to loans in the A and B risk tiers, loans with higher original balances, and more exposure to loans with a loan rate that is less than 10.0%, KBRA said.
Unsecured loans already accounted for a smaller percentage of the current pool, 55.0%, compared with the previous deal, OMFIT 2025-1, 65.0%, according to KBRA.
OMFIT 2026-1 is expected to close on June 15, with Barclays Capital as the lead underwriter, according to ratings analysts at S&P Global Ratings. Notes have a legal final maturity date of July 14, 2039, according to S&P and KBRA.
The deal includes a three-year revolving period when collections can be used to buy new collateral if it meets eligibility and reinvestment criteria as the transaction documents defines them. The revolving period, however, can end if any amortization triggers are in effect, according to KBRA.
Classes A, B, C and D benefit from initial credit enhancement levels of 33.60%, 28.80%, 2.45% and 11.10%, respectively.
The deal will repay notes sequentially, which lends subordination to the deal, KBRA said. Also, OMFIT 2026-1's capital structure includes overcollateralization representing 10.65% of the initial pool balance.
A cash reserve account is also in place, funded at an amount that equals 0.50% of the note balance or 0.45% of the initial pool balance, KBRA said. Gross excess spread represents 16.27%, the rating agency said.
As for the portfolio, KBRA says OneMain's 30+ day delinquencies and annualized gross charge-offs for its personal loan program declined from their peaks in Q1 2024 through March 31, 2026, the rating agency said.
KBRA finds that the pool contains 59,341 loans, with an average balance of $9,362. On a weighted average (WA) basis, the loans have an interest rate of 25.27%, KBRA said.
S&P assigns AAA, AA, A+ and BBB to classes A, B, C and D, while KBRA assigns AAA, AA, A and BBB- to classes A, B, C and D.
