DBRS Finalizes Provisional Ratings on OneMain Financial Issuance Trust 2017-1
Consumer Loans & Credit CardsDBRS, Inc. (DBRS) finalized its provisional ratings on the following Series 2017-1 Notes issued by OneMain Financial Issuance Trust 2017-1:
-- $607,680,000, Class A-1 rated AA (sf)
-- $126,320,000, Class A-2 rated AA (sf)
-- $58,280,000, Class B rated A (sf)
-- $63,720,000, Class C rated BBB (sf)
-- $91,370,000, Class D rated BB (sf)
The ratings are based on a review by DBRS of the following analytical considerations:
-- Transaction capital structure, proposed ratings and form and sufficiency of available credit enhancement.
-- The ability of the transaction to withstand stressed cash flow assumptions and repay investors according to the terms under which they have invested. For this transaction, the rating addresses the payment of timely interest on a monthly basis and principal by the legal final maturity date.
-- OneMain’s capabilities with regards to originations, underwriting and servicing.
-- The credit quality of the collateral and performance of OneMain’s consumer loan portfolio. DBRS has used a hybrid approach in analyzing the OneMain portfolio that incorporates elements of static pool analysis, employed for assets such as consumer loans, and revolving asset analysis, employed for such assets as credit card master trusts.
-- The legal structure and presence of legal opinions that address the true sale of the assets to the Issuer, the non-consolidation of the special-purpose vehicle with OneMain, that the trust has a valid first-priority security interest in the assets and that it is consistent with DBRS’s “Legal Criteria for U.S. Structured Finance” methodology.
The Series 2017-1 transaction represents the ninth securitization of a portfolio of non-prime and subprime personal loans originated through OneMain’s branch network.
Credit enhancement in the transaction consists of overcollateralization (OC), subordination, excess spread and a reserve account. The rating on the Class A-1 Notes reflects the 63.35% of initial hard credit enhancement provided by the subordinated notes in the pool, the Reserve Account (0.50%) and overcollateralization (4.10%). The rating on the Class A-2 Notes reflects the 26.20% of initial hard credit enhancement provided by the subordinated notes in the pool, the Reserve Account (0.50%) and overcollateralization (4.10%).The rating on the Class B Notes reflects the 20.30% of initial hard credit enhancement provided by the subordinated notes in the pool, the Reserve Account (0.50%) and overcollateralization (4.10%). The rating on the Class C Notes reflects the 13.85% of initial hard credit enhancement provided by the subordinated notes in the pool, the Reserve Account (0.50%) and overcollateralization (4.10%). The rating on the Class D Notes reflects the 4.60% of initial hard credit enhancement provided by the subordinated notes in the pool, the Reserve Account (0.50%) and overcollateralization (4.10%). Additional credit support may be provided from excess spread available in the structure.
Notes:
All figures are in U.S. dollars unless otherwise noted.
The principal methodologies are Rating U.S. Structured Finance Transactions and Rating U.S. Credit Card Asset-Backed Securities, which can be found on dbrs.com under Methodologies.
The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.
Please see attached appendix for additional information regarding sensitivity of assumptions used in the rating process.
The full report providing additional analytical detail is available by clicking on the link under Related Research at the right of the screen or by contacting us at info@dbrs.com.