Freedom Financial Network (FFN), a leading digital personal finance company, announces the closing of a securitization consisting of $204.93 million in rated notes backed by ConsolidationPlus personal loans.
The securitization, FREED ABS Trust 2022-2CP, is the second Freedom deal to receive an AAA rating from DBRS Morningstar and the fourth to receive a AAA rating from Kroll Bond Rating Agency (KBRA). It is also the first securitization of ConsolidationPlus loans to receive AAA ratings from two ratings agencies. The deal is the 12th securitization by Freedom Consumer Credit Fund (FCCF), an investment fund managed by Freedom Financial Asset Management (FFAM).
Underwriting for the ConsolidationPlus 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 ConsolidationPlus loans were originated by bank partners Cross River Bank® and MetaBank®, N.A. on the FFAM platform. ConsolidationPlus loans help borrowers accelerate the process of resolving unsecured debt. The loans are offered exclusively to clients of Freedom Debt Relief (FDR) and certain other debt resolution companies who have been enrolled in a debt program for at least six months and made timely payments into their dedicated accounts.
“The successful issuance of this securitization at such a challenging time in the broader financial market is a testament to the robust underwriting and credit risk models used to originate ConsolidationPlus loans,” said Barry Rafferty, Senior Vice President of Capital Markets at FFAM. “We are pleased to have once again earned AAA ratings from two credit ratings agencies and look forward to continuing on this positive trajectory in future deals.”
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 (high) (sf) by DBRS Morningstar. The D class notes were not rated by DBRS.
“ConsolidationPlus loans are an important method to help consumers address debt as they seek to get on the path to a brighter financial future,” said Andrew Housser, Co-Founder and Co-CEO of Freedom Financial Network. “The completion of this transaction during a time in which several other issuers pulled deals due to the volatile economic and geopolitical climate highlights our expertise and experience in this market segment where we help everyday people achieve their financial goals.”
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Underwriting the transaction was Truist, serving as structuring agent and joint book runner; Jefferies, joint book runner; and Credit Suisse, joint book runner. The transaction structure features overcollateralization, subordination, a reserve fund and excess spread. Issuance across all FCCF securitizations now totals nearly $3.5 billion and total loan originations through the FFAM platform now exceed $7.5 billion.
About Freedom Financial Network
Freedom Financial Network is a leading digital personal finance company. We do what traditional banks don’t: Put people first. Our solutions help everyday people get on, and stay on, the path to a brighter financial future, with innovative technology and personalized support.