KBRA Assigns Preliminary Ratings to Notes Issued by Fortiva Retail Credit Master Note Business Trust Series 2018-One

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Fortiva Retail Credit Master Note Business Trust Series 2018-One (Series 2018-One), a credit card ABS transaction.

This transaction, Series 2018-One, represents the Companys first term ABS issuance of its own collateral since 2004. Overall, the Company previously issued a total of four transactions which have all been paid in full. Loans in Series 2018-One are originated by a Missouri state-chartered bank, The Bank of Missouri. The transaction has a revolving period of two years so no principal payments will be made on the notes during this time unless an Early Redemption Event occurs.

Atlanticus Holdings Corporation (Atlanticus or the Company) is a specialty finance company originally formed in 1996 under the name CompuCredit Corporation. The Company changed its name in 2012 to Atlanticus and is a public company listed on the Nasdaq Stock Exchange under the symbol ATLC with approximately 45% of the Companys shares traded and the remaining 55% owned principally by the founding Hanna family. Since inception, the Company has serviced over 17 million new consumers, raised $9 billion in capital and funded $25 billion in loans. Atlanticus is headquartered in Atlanta, Georgia, has 313 employees and currently issues both general purpose and private label retail credit cards.

The Company currently facilitates point-of-sale financing through its Fortiva Retail Credit Program which they began offering in 2011. The contracts are often offered to consumers who may have been declined under traditional financing options. Fortiva specializes in providing its merchant partners with customized ˜second-look private label credit card programs and supplements programs offered by a primary credit provider. Their customers may have had difficulty qualifying for credit because of a limited or imperfect credit history, which may include a history of irregular employment, previous bankruptcy filings and/or repossession of property.

The preliminary ratings reflect the initial credit enhancement levels ranging from 20.55% for the Class A notes to 5.00% for the Class C notes. The credit enhancement for the notes will consist of excess collateral amount as a result of the discount option, subordination of junior note classes and a portion of the transferor amount, and excess spread.

KBRA analyzed the transaction using the Global Credit Card ABS Rating Methodology published on November 28, 2017. KBRAs credit card methodology incorporates an analysis of: (1) the quality and expected performance of the underlying collateral, (2) the originators and servicers business model and operational capabilities and (3) the transaction terms, including capital structure, credit enhancement and legal structure. KBRA will review the operative agreements and legal opinions for the transaction prior to closing.

To access ratings, reports and disclosures, click here.

Preliminary Ratings Assigned: Fortiva Retail Credit Master Note Business Trust Series 2018-One

Class   Preliminary Rating   Principal Balance
A   A (sf)   $139,900,000
B   BBB (sf)   $15,650,000
C   BB (sf)   $11,730,000

Related Publications: (available at www.kbra.com)


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About KBRA and KBRA Europe

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.

Analytical Contacts:
Kroll Bond
Rating Agency
William Carson, Senior Director
(646) 731-2405
[email protected]
Mikhalevsky, CFA, Associate Director
(646) 731-3356
[email protected]
Silverhardt, Senior Analyst
(646) 731-2492
[email protected]
Patel, Senior Analyst
(646) 731-3374
[email protected]
Kelley, Senior Managing Director
(646) 731-2337
[email protected]