SuttonPark Marketing is offering its fourth structured-settlement payments securitization backed by court-ordered personal injury and lottery settlements.
According to DBRS, SuttonPark Structured Settlements 2017-1 is a $218.5 million notes offering that will securitize a portion of the more than $1.23 billion of structured settlement payment accounts that SuttonPark has acquired since 2009.
DBRS has assigned provisional ‘AAA’ ratings to $212.3 million in Class A notes and a ‘BBB’ to the $6.24 million in Class B notes. The notes have an expected maturity date of 2043.
A structured settlement is an arrangement resolving a claim by with periodic payments, rather than a lump sum in a personal injury claim settlement or lottery winnings. Approximately $6 billion of structured settlements are issued each year in the United States.
SuttonPark purchases both court-ordered structured settlements and lottery settlements, bundling them into collateral for bonds. There have been no losses on these payments to date, according to DBRS.
J.G. Wentworth is another firm that periodically securitizes the injury, annuity and lottery payment accounts it acquires and services.
Personal injury settlements make up the bulk (94.27%) of the pool of accounts that receive periodic payments from high-rated insurance companies (84.78% with an investment-grade corporate rating of at least ‘A’).
The Class A notes are supported by 16% credit enhancement, including 12.5% overcollateralization, 2.5% surbordination of the Class B notes and a de minimus 0.3% CE from excess spread.
The transaction includes a prefunding account of $65.6 million, according to DBRS.
SuttonPark last issued bonds in December.