Springleaf Financial is looking to top up its debut consumer loans asset-backed securitization issued in February with a $400 million deal.
The deal called Springleaf Funding Trust 2013-B has been assigned preliminary ratings by Standard & Poor’s and will offer investors ‘A’ rated, class A notes; ‘BBB’ rated, class B notes; ‘BB’ rated, class C notes; ‘B’ rated, class D notes.
The class A, B, C, and D notes are structured with 34.7%, 29.2%, 26.5%, and 23.5% credit support.
Springleaf has made several changes to its second deal. According to S&P the 2013-B transaction increased its revolving period increased to 36 months from 24 months. Springleaf also provided managed portfolio data on monthly voluntary prepayments, excluding prepayments due to renewals. Prepayments are an additional source of cash flow that allow the transaction to pay down the rated notes faster and reduce their exposure to a pool with deteriorating credit performance.
S&P said that based on the information, it was able to assume a voluntary 10.0% constant prepayment rate (CPR) in its stressed cash flow scenarios. For the series 2013-A transaction, the ratings agency assumed a 0.0% CPR in the absence of voluntary prepayment data. The transaction was also able to lower the credit support to the class A, B, C, and D notes based on the voluntary prepayments in S&P’s stressed cash flow scenarios.
Overcollateralization of the notes increased to 9.50% from 8.75% of the initial adjusted loan principal balance.
Along with this latest transaction, Springleaf refinanced its secured term loan to extend the maturity to 2017 from 2015 and increased the size of the borrowing to $3.75 billion from $3 billion. Springleaf paid $714.9 million on April 11, 2013, $500 million on May 15, 2013, and $500 million on May 30, 2013, of principal plus accrued interest to reduce the outstanding balance of the loan to $2.035 billion.
The company said that the term loan refinancing, the three residential mortgage securitizations completed last year, and the SLFT 2013-A transaction completed in February this year, will provide it adequate liquidity through 2014.