Oxford Finance Funding Trust is preparing to raise money from the securitization market to fund loans extended to companies in the healthcare sector, including long-term care facility operators and life sciences companies.
Among the life sciences collateral, the loans include senior secured leveraged lending loans, senior secured enterprise lending loans and senior secured real estate loans, according to Kroll Bond Rating Agency.
The deal, Oxford Finance Funding Trust, 2025-3, will sell $475 million in asset-backed securities (ABS) to investors through five tranches of class A,B, C, D and E notes, says Kroll Bond Rating Agency. All the notes are slated to have a legal final maturity date of February 2035.
Barclays Capital is Oxford Financial's sole structuring advisor and lead active bookrunner. Oxford Finance will service the loans and Computershare Trust.
Oxford's collateral has a maximum advance rate of 72.0% on the A1 and A2 notes and 82.0% on the class B notes, according to KBRA.
As of September 22, the collateral pool consisted of 55 loans to 49 borrowers, with a total outstanding loan balance of $533.6 million, KBRA said. On average, loans have an initial balance of $9.7 million. On a weighted average (WA) basis they have an origin term of 55 months, with a remaining 38 months, with a weighted average cash yield of 10.3%.
By loan exposure, healthcare loans, life sciences loans and non-healthcare loans account for 64.0%, 29.7% ad 6.3% of the pool balance, respectively.
The transaction structure boosts credit to the notes in several ways. For one, the class B notes will be subordinated to the class A notes. Classes A and B benefit from overcollateralization, with maximum cumulative advance rates of 72% and 82%, respectively.
There is also a liquidity facility with an amount that equals 3.0% of the outstanding notes balance, KBRA said.
Oxford Finance does have a potential credit weakness, in its two-year reinvestment period. During this window, cash flow from principal collections can be reinvested in additional loans if they meet eligibility requirements.
KBRA assigns A to the A1 and A2 notes, plus the liquidity facility, and BBB to the class B notes.
