A pool of consumer loans and credit cards will secure the $340 million issuance from the SoFi Consumer Loan Program 2023-1S, a deal that will contain only seasoned collateral, unlike previous securitizations from the program.
The underlying loans were originated in 2018-2022 according to a pre-sale report from Kroll Bond Rating Agency. The Asset Securitization Report deal database notes that the trust will issue just one class of notes, and a series of banks will manage the deal—Bank of America, Citigroup Global Markets, Deutsche Bank Securities, Goldman Sachs & Co., J.P. Morgan Securities and Mizuho Securities.
Although the collateral pool consists entirely of seasoned assets, it does have a lower weighted average seasoning of 21 months, compared with 27 months in the SoFi Consumer 2022-1S deal, and a slightly lower average current loan balance of $19,781 compared with $20,988, according to KBRA.
Original loans terms are trending shorter, too. The pool contains more loans with original terms of 24, 36, 48 and 60 months, and fewer loans with 72- and 84-month original terms, KBRA said. As for loan distribution by internal credit quality, KBRA note that SoFi Consumer 2023-1 has fewer loans in Tier 4 through Tier 7.
SoFi Consumer 2023-1S will be repaid through a full turbo payment structure, where it will use available funds to pay principal on the class A notes after it has made distributions to pay senior transaction fees.
KBRA has assigned an expected lifetime cumulative net loss of 5.35%, an increase from 4.55%, mainly because it expects losses for the vintages in the 2023-1S pool as well as some less seasoned collateral in the pool.
Higher overall interest rates are also impacting the deal, as higher coupons on the notes whittle away annual gross excess spread, by about 0.23%, the rating agency explained.
KBRA says it expects to assign a 'AAA' rating to the class A notes. Meanwhile S&P Global Ratings and Morningstar | DBRS also expect to assign 'AAA' ratings.
Notes are expected to price over the interpolated yield curve, with guidance of 105 to 115 basis points, or a coupon of 5.81%. The notes have a final scheduled payment date of May 15, 2031.
