KBRA assigns preliminary ratings to FREED ABS Trust 2021-3FP


NEW YORK–(COMMERCIAL THREAD) – Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four categories of notes issued by FREED ABS Trust 2021-3FP (“FREED 2021-3FP”), a transaction in consumer loan asset-backed securities of $ 230.49 million. The preliminary ratings reflect the initial credit enhancement levels of 58.00% for Class A Notes, 38.50% for Class B Notes, 28.75% for Class C Notes and 15.00% for Class D notes. The credit enhancement consists of over-collateralization, subordination (except for class D notes), a reserve account funded during post-closing periods and ‘excess margin.

This transaction represents the tenth global ABS securitization secured by unsecured consumer loans issued by Freedom Financial Asset Management, LLC (“FFAM” or the “Company”). Freedom Financial Network (“FFN”), the parent company of FFAM, is a San Mateo, California-based company that operates in Tempe, Arizona. FFN was founded in 2002 and provides financial solutions to consumers, including installment loans, debt restructuring, home equity lines of credit (“HELOC”) and financial education, through its four subsidiaries (FFAM, Freedom Debt Relief, LLC (“FDR”), Lendage, LLC (“Lendage”) and bills.com) and a fund (“Freedom Consumer Credit Fund” or “FCCF”). Since 2002, two private equity firms, Vulcan Capital and Stone Point Capital, have invested in Pantheon Partners, LLC, the parent company of FFN.

KBRA applied its global consumer credit ABS rating methodology, as well as its global structured finance counterparty methodology and its global ESG rating methodology as part of its analysis of the underlying collateral pool of the transaction. , the proposed capital structure and historical data from the FFAM static pool. KBRA reviewed its operational review of Freedom, which was completed in August 2019, as well as periodic update calls with the Company. Operational agreements and legal opinions will be reviewed prior to closing.

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Further information on key credit considerations, sensitivity analyzes that examine the factors that may affect these credit ratings and how they might lead to an upgrade or downgrade, and ESG factors (when they are a key factor in the change in credit rating or rating outlook) can be viewed in the full rating report mentioned above.

A description of all substantially significant sources that were used to prepare the credit rating and information about the method (s) (including significant models and sensitivity analyzes of relevant key rating assumptions, if any) used to determine 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 information relating to this rating measure is available in the information disclosure form (s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures can be found at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a credit rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a credit rating agency with the UK Financial Conduct Authority under the temporary registration regime. In addition, KBRA is appointed as the designated rating agency by the Ontario Securities Commission for issuers of asset-backed securities to file a simplified prospectus or a shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.


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