Stream Innovations is preparing its fifth securitization, raising $255.6 million in bonds secured by a pool of home remodeling loans originated through the Stream Program, to customers of Power Home Remodeling Group.
The loans are normally extended to consumers purchasing a home for a home improvement project, most of which involve home efficiency products, like window and door installations, and which Power Home installed, according to Kroll Bond Rating Agency.
Stream Innovations 2026-2 Issuer Trust, or STRE 2026-2, will sell the notes through four tranches of class A, B, C and D, which all have a legal final maturity date of March 15, 2047, KBRA said. Also, those classes of notes have initial credit enhancement levels of 25.85%, 17.75%, 12.40% and 7.45%, respectively.
Structurally, the deal will repay due principal on a pro rata basis if the class A credit enhancement is satisfied, no cumulative net loss trigger event has occurred, and there isn't a pool balance amortization event in effect. Otherwise, KBRA said, the principal will be paid sequentially beginning with the class A notes.
Credit to the notes gets a boost from overcollateralization level, initially 6.95% of the initial aggregate pool balance, and subject to a floor of 1.00%, of the initial pool balance, KBRA said.
STRE 2026-2 also benefits from a reserve fund, provided at closing, which is equal to 0.50% of the initial aggregate pool balance and excess spread of about 3.23%, the rating agency said.
By STRE 2026-2's initial cutoff date, the deal consisted of about $172.7 million in receivables and was expected to reach a balance of $274.7 million after a here-month prefunding period, KBRA said.
Underlying borrowers are highly qualified, with a FICO score of 771 and an original term of 158 months on a weighted average (WA) basis. Average original balances are about $23,752, and an interest rate of 10.46%, KBRA said.
Noting that the deal is slated to close KBRA assigns AAA, AA-, A- and BBB- to classes A, B, C and D, respectively.
