KBRA assigns preliminary ratings to two classes of notes for Oportun Funding 2022-1, LLC (“Oportun 2022-1”), a $400 million consumer loan ABS transaction with KBRA rating the Class A and Class B notes totaling $378.949 million. Unlike several other Oportun, Inc. (“Oportun” or the “Company”) transactions which included a revolving period where additional eligible collateral could be acquired into the securitization trust, Oportun 2022-1 will be collateralized by a non-revolving pool of eligible consumer amortizing loans originated by Oportun.
Oportun 2022-1 represents the nineteenth ABS securitization collateralized by unsecured and secured consumer installment loans originated by Oportun, a wholly-owned subsidiary of Oportun Financial Corporation, a publicly traded, California based consumer finance company listed on the NASDAQ. The Company provides financial services, including both unsecured and secured personal installment loans to borrowers who do not have a credit score or who may have a limited credit history. Oportun has been issuing unsecured consumer loans for 15 years and in April 2020 began offering secured personal installment loans (“SPL”) which are at least partially secured by an automobile title.
As of December 31, 2021, the average unsecured loan sizes range from $300 - $11,300 with an average of $3,357. As of December 31, 2021, the weighted average APR was 32.4% and the weighted average original term was 35 months. For secured personal loans, the average loan size ranges from $2,525 to $20,000 with terms from 21 to 64 months. Loans typically require bi-weekly or semi-monthly payments (or monthly as required by law), which is proximate to when a customer receives wages.
KBRA analyzed the transaction using the Consumer Loan ABS Global Rating Methodology as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the portfolio pool data, underlying collateral pool, and capital structure. KBRA considered its operational reviews of Oportun, as well as periodic due diligence calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.
- Consumer Loan ABS Global Rating Methodology
- Global Structured Finance Counterparty Methodology
- ESG Global Rating Methodology
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
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