Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes (the Notes) issued by Kabbage Asset Securitization LLC, Series 2019-1 (Kabbage 2019-1).
This transaction is Kabbage, Inc.s (Kabbage or the Company) third securitization and it is expected that the proceeds of the sale of the Notes will be used to refinance the Companys existing $610 million outstanding Kabbage Asset Securitization LLC Series 2017-1 Notes and provide extra funding capacity for Kabbage.
Founded in 2009, Kabbage, Inc. (Kabbage or the Company) is a leading global financial services, technology and data platform serving small- and medium-sized businesses (Merchants). Kabbage pioneered an automated application, underwriting and servicing platform (the Kabbage Platform) that evaluates the creditworthiness of Merchants using its proprietary risk scoring model that leverages traditional underwriting data such as credit bureau reporting and revenue and cash flow analysis, as well as data generated through business checking accounts and other data sources, including online accounting software, payment processing platforms, e-commerce websites, and shipping and delivery companies to provide automated, online access to business loans (the SMB Loans). Kabbage also provides working capital to Merchants by purchasing a specified amount of a Merchants future receivables known as merchant cash advances (MCAs). None of the receivables in the current pool consist of MCAs, but the transaction allows up to 10% MCA receivables. The Kabbage small business loan program (the Kabbage Program) is offered via the Kabbage Platform.
The Notes will be secured by a revolving pool of receivables (the Receivables or the Portfolio) consisting of (i) in the case of SMB Loans, an up to 100% participation interest in the receivables associated with the SMB Loans or (ii) MCAs. The transaction features a revolving period (the Revolving Period), which will end on the earlier of (i) the close of business on February 28, 2022 and (ii) the date on which a Rapid Amortization Event has occurred. The Notes will be expandable term notes such that at any time during the Revolving Period, the Issuer may periodically issue additional Notes, so long as certain conditions are met, including receipt of rating agency confirmation.
KBRA analyzed the transaction using the Global General Rating Methodology for Asset-Backed Securities published on November 28, 2017.
|Notes||Preliminary Rating||Initial Principal Balance|
|Class A||AA (sf)||$421,221,000|
|Class B||A (sf)||$59,715,000|
|Class C||BBB (sf)||$69,348,000|
|Class D||BB (sf)||$35,316,000|
|Class E||B (sf)||$24,400,000|
To access ratings, reports and disclosures, click here.
Related Publications: (available at www.kbra.com)
- Global General Rating Methodology for Asset-Backed Securities
- Kabbage Asset Securitization LLC, Series 2019-1 Peer Comparison
- Kabbage Asset Securitization LLC, Series 2019-1 Representations & Warranties
- Kabbage Asset Securitization LLC, Series 2019-1 Pre-Sale Report
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
Neglia, Managing Director
Chris Baffa, Associate Director
Alla Mikhalevsky, CFA, Director
Andrew Silverhardt, Senior Analyst