ABS

Debt service coverage ratio triggers, including cash trapping and rapid amortization, will provide much of the credit enhancements to the notes.

The deal includes a minimum assets test, requiring the issuers to own at least 10 assets at the end of the nine-month delivery period, or seven assets after the delivery period.

The obligors' non-investment grade credit quality could present challenges to the timely repayment of notes. Yet PREF focused on high-revenue obligors backed by private equity sponsors.

Investors and analysts see pockets of value in asset-backed securities, as elevated fiscal policy uncertainty and wariness about the economic environment rise.

KBRA notes that commercial obligors with an investment grade rating make up 76% of MassMutual's customer base. Within that group, payments from the U.S. government account for 14.4%, the largest concentration.

Island is a first-time issuer and largely originates and services the loans through its network of 48 branches.

The inaugural deal is expected to close by the end of the month. Among its structural features are cash trap and cash sweep provisions.

The movements were spurred by jitters around persistent inflation and ballooning government debt, leading futures traders to wager that the Fed is unlikely to ease monetary policy again until late 2025.

The prime pool can be upsized to $1.7 billion, and the base pool amount has a lower securitization discount rate of 9.60%, lower than the previous deal from this program.

The current deal adds a class E tranche, which provides subordination to the pool, unlike previous Oportun transactions dating back to 2022.

U.S. Treasuries plunged on Friday after data showed the labor market grew in December, sending the 30-year bond's yield above 5% for the first time in more than a year.

Fitch Rating says it noticed a greater preference for consumers to use cellphones for a longer period and previously decreased the assumptions for upgrade losses to 0.25%, from 0.35%.

Up to 68% of the portfolio assets were restructured. The securitization has a grace period with term extension that allows borrowers to pay interest-only.

CLO market strength likely to continue in 2025 if the U.S. economic soft landing remains on track.

The transaction will fund a new storm recovery reserve of $150 million, approximately $45 million of which will help recover losses from June 2023 storms.

After a double-digit increase, analysts expect sectors to continue to grow in 2025, albeit with some credit deterioration.

The private, pass-through structure includes elements of both public transactions and those with bank expertise.

ABS overall should outperform, but risks remain in specific areas

The deferred pay structure offers investors a premium over traditional residential transition loan securitizations.

Small Business Act 7(a) loans will secure the notes. Interest will be repaid through subordination and interest will be repaid on a pro rata basis.