KBRA Assigns Ratings to FREED ABS Trust 2020-2CP
The financial impact of COVID-19 has resulted in rising unemployment, which can adversely impact the performance of the subject pool and unsecured consumer loans in general. Owing to KBRA’s expectations of high and rising unemployment, KBRA increased its base case default assumptions for the subject pool in a manner that was consistent with a recent portfolio review of the sector detailed in the following report:
The collateral in the FREED 2020-2CP deal includes approximately
This transaction represents the sixth overall ABS securitization collateralized by unsecured consumer loans originated through Freedom Financial Asset Management.
KBRA applied its Global Consumer Loan ABS Rating Methodology and Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and FFAM’s historical gross loss data. KBRA also conducted an operational assessment of FFAM, as well as a review of the transaction’s legal structure and transaction documents. KBRA reviewed the operative agreements and legal opinions for the transaction prior to closing.
Click here to view the report. To access ratings and relevant documents, click here.
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FREED ABS Trust 2020-2CP KCAT - Global Consumer Loan ABS Rating Methodology
- Global Structured Finance Counterparty Methodology
Disclosures
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the
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