Select Portfolio Servicing (SPS), a Credit Suisse subsidiary, plans to issue $1 billion in term notes backed by repayment rights to interest and principal payments advanced to bondholders when homeowners fall behind on their mortgage payments.
The term notes will be offered over two series from the SPS Service Advance Receivables Trust. The series 2015-T2 will offer a total of $600 million of notes with an expected repayment date of Jan. 16, 2017. The series 2015 -T3 will offer a total of $400 million of notes with an expected repayment date of July 17, 2017.
Standard & Poor's assigned ratings of 'AAA' to the class A notes issued in each series; 'AA' ratings to the class B notes; 'A' ratings to the class C notes and 'BBB' ratings to the class D notes. Both series of term notes are structured with revolving periods, during which only payments of interest are made, that are scheduled to last 14 months for the 2015-T2 notes and 20 months for the 2015-T3 notes.
The trust is set up to offer up to $225 million in short-dated, variable funding notes (VFN). SPS can draw on the VFNs to purchase additional receivables during the revolving period.
The 2015-VFI, VFNs are rated similarly to the term notes: the class A notes are rated 'AAA', the class B notes are rated 'AA'; the class C notes are rated 'A' and the class D notes are rated 'BBB'. The VFN's expected repayment date is scheduled for Nov. 15, 2016.