PFS Financing plans to issue a $282 million securitization backed by insurance premium finance loans, which are usually installment loans that have less-than-one-year duration.
Premium financing funds the premiums of life insurance policies purchased for estate planning or business purposes. The unearned premiums serve as collateral for the insurance premium loans. The financing proceeds typically fund the purchase of property/casualty insurance policies of one year’s duration.
Moody’s Investors Service assigned preliminary ratings of ‘Aaa’ to the transaction, called Series 2013-B, class A notes.
The credit risk of a pool of insurance premium finance receivables resides primarily with the insurance companies, explained Moody’s.
The transaction is structure with two classes of notes: Class A and Class B notes, according to the Moody’s presale report. The 2013-B Notes will be one of several series of notes of the Issuer outstanding under the master trust.
The collateral for the 2013-B Notes consists of a revolving pool that will likely include more than 350,000 insurance premium installment contracts on the closing date.
Citigroup, JP Morgan, RBC Capital Markets and RBS Securities are lead underwriters on the deal.
PFS is a subsidiary of IPFS Corporation (IPFS), formerly known as Premium Financing Specialists.