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KBRA Assigns Preliminary Ratings to Notes Issued by Genesis Sales Finance Master Trust Series 2019-AKroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Genesis Sales Finance Master Trust, Series 2019-A ("Series 2019-A"), a credit card ABS (News - Alert) transaction. This transaction, Series 2019-A, represents Genesis Financial Solutions, Inc's, including its affiliates ("Genesis" or the "Company") first term ABS issuance. Receivables in Series 2019-A are originated by First Electronic Bank, The Bank of Missouri and Sterling Jewelers, Inc. Series 2019-A will issue four classes of notes in an aggregate principal amount of $135.9 million. The Notes are backed by a pool of non-prime unsecured credit card loans. The transaction has a revolving period of two years where no principal payments will be made on the notes during this time unless an Early Amortization Event occurs. Genesis is a privately held consumer finance company that was established in 2001 and currently issues both general purpose and private label retail credit cards. The Company was originally started to originate, acquire and service consumer loans. The Company was founded by Irving Levin, who currently serves as board chairman. In 2011, the Company entered the private label credit card business and in 2013 it entered the general-purpose credit card business. Genesis is currently majority owned by Endeavor Capital and individual investors (58.7%), Founder and management (35.2%) and OneMain Financial (6%). The Company is backed by Endeavor Capital, which has invested $55 million. The Company raised an additional $10 million from OneMain Financial in 2015. However, pursuant to the terms of the Agreement and Plan of Merger, dated December 21, 2018, funds managed by Castlelake L.P., a global private investment firm managing private funds, agreed to acquire a majority stake in Genesis. Following the acquisition, Genesis expects to continue its current day-to-day operations with the existing management team. As of September 30, 2018, Genesis had total assets of approximately $367 million and total stockholder's equity of approximately $85 million. Genesis is headquartered in Beaverton, Oregon, has 649 full time employees. The preliminary ratings reflect the initial credit enhancement levels ranging from 49.30% for the Class A notes to 8.05% for the Class D notes. Credit enhancement on the notes consists of i) excess cash flow generated by the pool of credit card loans ii) overcollateralization iii) a reserve account and iv) subordination (in the case of the Class A Notes, Class B Notes and Class C Notes). KBRA analyzed the transaction using the Global Credit Card ABS Rating Methodology published on November 28, 2017. KBRA's credit card methodology incorporates an analysis of: (1) the quality and expected performance of the underlying collateral, (2) the originator's and servicer's 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: Genesis Sales Finance Master Trust Series 2019-A
Related Publications: (available at www.kbra.com)
CONNECT WITH KBRA 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.
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