Deal is the third Freedom securitization of 2022 to receive AAA ratings from both DBRS and Kroll
Freedom Financial Network (FFN), a leading digital personal finance company, announces the closing of a securitization consisting of $323.55 million in rated notes backed by FreedomPlus personal loans.
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The securitization, FREED ABS Trust 2022-3FP, is the third Freedom deal to receive an AAA rating from DBRS Morningstar and the fifth to receive a AAA rating from Kroll Bond Rating Agency (KBRA). The deal is the 13th securitization by Freedom Consumer Credit Fund (FCCF), an investment fund managed by Freedom Financial Asset Management (FFAM).
Underwriting for the FreedomPlus loan program is based on proprietary algorithms that evaluate behavioral, transactional, employment and income data, as well as a manual review of borrowers’ creditworthiness. The underlying FreedomPlus loans were originated by bank partners Cross River Bank® and MetaBank®, N.A. on the FFAM platform. FreedomPlus loans help consumers consolidate debt, lower interest rates and convert revolving debt into lower-cost, more consumer-friendly installment loans.
“The characteristics of this securitization should be very familiar to the market,” said Barry Rafferty, Senior Vice President of Capital Markets at FFAM. “One of the pillars of our ABS program is consistency in our product structure and cadence of new deals, and we believe this deal is an important demonstration of that reputation to the market.”
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The Class A, Class B, Class C and Class D fixed-rate notes were rated AAA (sf), AA- (sf), A- (sf) and BBB- (sf) by KBRA. The Class A, Class B and Class C fixed-rate notes were rated AAA (sf), AA (sf) and A (sf) by DBRS Morningstar. The D class notes were not rated by DBRS.
“FreedomPlus loans are an important financial tool for consumers seeking to consolidate unsecured debt,” said Andrew Housser, Co-Founder and Co-CEO of Freedom Financial Network. “We are pleased to continue our strategy of regular, programmatic securitizations, particularly given the considerable shifts underway in the capital markets and economy overall.”
Underwriting the transaction was Credit Suisse, serving as structuring agent and joint book runner; Jefferies, joint book runner; and Truist Securities, joint book runner. The transaction structure features overcollateralization, subordination, a reserve fund and excess spread. Issuance across all FCCF securitizations now totals over $3.8 billion and total loan originations through the FFAM platform now exceed $8 billion.
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