A pool of unsecured consumer loans from sponsor Sunbit Loans will collateralize $200 million in asset-backed securities being offered through the Sunbit Asset Securitization Trust, 2025-1.
This is the first public 144a transaction sponsored by Sunbit, a buy now-pay later lender that offers financing through select brick-and-mortar stores and service verticals, according to Morningstar | DBRS. Unsecured consumer installment loan receivables, compose the loans in the pool, according to Sunbit, DBRS said.
Although Sunbit has total warehouse funding capacity of more than $1 billion, the underlying assets in the transaction have an increased advance rate that was several basis points higher than existing balance sheet funding transactions, according to the company.
Sunbit is servicing the underlying loans, and Nelnet Servicing is on the deal as backup servicer, the rating agency said. TAB Bank, a state-chartered bank in Utah, originated the receivables in the trust.
DBRS notes that the deal issues notes through for four tranches of A, B, C and D notes, which will pay noteholders a blended fixed rate of 5.71%, the company said. The securitization was also oversubscribed, with participation from more than 25 institutional investors.
Citigroup Global Markets is the sole structuring agent, according to an announcement from Sunbit. JPMorgan Securities and Atlas SP join Citi as joint co-leads on the transaction, Sunbit said.
Sunbit series 2025-1 features a 23-month revolving period, during which it will not repay investors any principal. Instead, the principal payments will start during the amortization period that follows, according to the rating agency.
The transaction can buy Eligible Receivables during the revolving period, if the deal can maintain concentration limits and restrict purchases to eligibility criteria, DBRS. The revolving period has other limits—it can stop, and amortization can begin if it trips certain performance triggers, the rating agency said.
For instance, on any monthly payment date if the three-month annualized net loss ratio exceeds 15.0%, the amortization period can begin. The paydown period can also start if, for instance, the three-month average delinquency ratio exceeds 5.00%, on any monthly payment date, DBRS said.
During the amortization period, which starts in July 2027, the deal will repay principal sequentially to noteholders.
The deal will sell the notes through four classes of A, B, C and D notes, which will repay investors sequentially. All the notes have a maturity date of July 15, 2030, the rating agency said.
DBRS assigns AA, A, BBB and BB to the class A, B, C and D notes, respectively, according to Asset Securitization Report's deal database.
