Home improvement financings that purchased home efficiency products, most of which are windows and doors, will secure $194.5 million in asset-backed securities from the Stream Innovations Issuer Trust.
This is Stream Innovations Inc.'s inaugural 144a securitization, according to Kroll Bond Rating Agency, whose analysts assigned ratings to the notes. The deal, Stream Innovations 2024-1 Issuer Trust offers three classes of A, B and C notes to investors, all of which have a legal final maturity date of July 15, 2044, analysts said.
Stream Innovations, series 2024-1, will repay the principal on a pro rata basis. If the class A credit enhancement test is not met, or there is an amortization event, the transaction uses a sequential pay structure, where the class A notes get principal payments before all subordinate notes.
The notes also benefit from initial overcollateralization representing 8.0% of the pool. Plus there is also a 0.50% reserve fund and excess spread of 2.19%.
KBRA assigned ratings of A-, BBB- and BB- to the A, B and C notes, partially based on respective credit enhancement levels of 20.50%, 14.45% and 8.50% credit enhancement levels, respectively, according to the rating agency. Several owners of Power Home, founded in 1992, also founded Stream Innovations in 2020, which provides the financings through 21 offices in the U.S. Power Home completes the installations, and has done more than one million since its inception, according to KBRA.
Stream also services a portfolio of about $630 million as of April 30, 2024. On this deal, Stream is the loan servicer, while Systems & Services Technologies is on the deal as backup servicer, according to KBRA. Stream aims to finance $1,000 to $100,000 in loan amounts, with an average initial principal balance of $20,000, the rating agency said.
As far as the customers go, Stream Innovations' typical borrower has a weighted average (WA) FICO score of about 760 and annual income of about $150,000, with an average credit profile of 20 years, KBRA said. As for this specific deal, which had a cutoff date of May 10, 2024, the initial pool balance consists of contracts whose customers have a WA FICO score of 765, a WA term of 157 months, an average original balance of about $22,000 and a current WA interest rate of 10.36%.
Since the collateral pool already has loans originated, there is no prefunding collateral, KBRA said.
