IPFS has returned to sponsor $400 million in asset-backed bonds that will repay investors from a stream of life insurance premium loans, issuing the bonds through PFS Financing Corp., series 2024-E and 2024-F.
Series 2024-E will issue $100 million in notes, while 2024-F will sell $300 million to investors, all through a master trust structure, the rating agencies said.
The PFS program is sticking to a frequent pattern of issuing two series of notes, each with two tranches, and the same closing date for both transactions, with some differences between the series, such as the notes' benchmark, according to Asset Securitization Report's deal database. The database did not have information on the E 2024-E series. Moody's Ratings says the class A notes will be pegged to the one-month Secured Overnight Financing Rate (SOFR), and classes A and B notes have a legal final maturity date of July 17, 2028.
The database says that
Class B notes provide 2024-E notes with 4.2% in overcollateralization, 5.7% subordination, Moody's said. The pool contains 494,987 accounts, where the top borrower accounts for 0.32%, and the top five account for 1.19%, and its granularity counts as a positive credit attribute. On average, the loans have a balance of $13,335.
IPFS is a specialty business and is one of the largest insurance premium finance companies in the U.S. Any concerns around its monoline business model—such as potential vulnerability to economically stressful conditions—are mitigated because PFS has a warm back-up servicing agreement with UMB Bank, Moody's said.
On the 2024-F series, the database finds that notes from the 2024-F series will be benchmarked to the three-month interpolated yield curve, it said. Yields are expected at 4.8% and 5.0% on classes A and B notes, respectively.
S&P says all the Series 2024-F notes have a legal final maturity of Aug. 15, 2029.
Moody's assigns the AAA and A to the classes A and B notes, respectively, on both series of notes; and S&P also assigns AAA and A to the classes A and B notes, respectively.
