Payment plans on mobile devices will provide collateral for $600 million in asset-backed securities (ABS) through the latest Verizon Master Trust Series.
Series 2023-7 will have the highest number of receivables and the highest number of accounts since the 2020-A deal, according to a pre-sale report from Fitch Ratings. Cellco Partnership is sponsoring the deal, originated the loans, and is servicing on the underlying receivables.
RBC Capital Markets is the lead underwriter on the deal, according to Fitch. The trust will issue notes to investors through four tranches, all of which will have a Nov. 20, 2029 legal final maturity date. Classes A1A and A1B are both rated 'AAA', with total hard credit enhancement levels of 19.25%, Fitch said.
Classes B and C are rated 'AA+' and 'AA-', respectively, ratings analysts said.
Consumer and business accounts are in the collateral pool, with remaining terms of no more than 36 months. While current trust has a mix of 24-, 30- and 36-month original-term receivables, originations made after Feb. 3, 2022 will primarily have 36-month original terms. Business receivables amount to 9.99% of the pool as of Oct. 6, 2023 and terms of the deal say that ratio cannot exceed 10% for the life of the transaction.
The current transaction is similar in credit quality to the most recent transaction, the VZMT 2023-6, according to ratings analysts. On average, the borrowers have a non-zero FICO score of 723, the same as VZMT 2023-6, Fitch said. Accounts with upgrade eligibility account for 56.12% of the pool, slightly lower than the 56.17% on the VZMT 2023-6.
VZMT 2023-7's pool is also highly diversified geographically, as with other transactions in the program. California accounts for the highest concentration of underlying receivables, with 9.8%, followed by Florida and Texas with 6.2% and 6.0%, respectively.
