Avant Loans Trust Secures Ratings for New Unsecured Notes

Ratings Assigned to Avant Loans Funding Trust 2025-REV1

KBRA has taken a significant step by assigning preliminary ratings to several classes of notes issued by Avant Loans Funding Trust 2025-REV1, which is known as AVNT 2025-REV1. This transaction focuses on unsecured consumer loan asset-backed securities (ABS). The ratings reflect a robust initial hard credit enhancement level that varies from 50.39% for the Class A Notes down to 4.22% for the Class E Notes. The credit enhancement involves mechanisms such as overcollateralization and a cash reserve account that fortifies the overall structure.

Overview of the Transaction

This marks Avant, LLC’s inaugural rated securitization for the year 2025, and the 16th transaction overall. The AVNT 2025-REV1 will comprise five classes of notes, collectively amounting to $200 million, which will be backed by a trust certificate originating from unsecured consumer loans facilitated through Avant's advanced online marketplace lending platform.

With an initial three-month prefunding window, the transaction will also bring in an additional approximately $20.4 million of loans into its portfolio. To further enhance capital access, a revolving period spans two years, enabling the periodic acquisition of additional loans which can boost the total backing for the notes.

Avant's Lending Platform

Avant has been operating since 2012 and has established a noteworthy online lending platform that primarily serves non-prime consumers seeking unsecured personal loans and credit cards. Typical borrowers using the platform tend to possess FICO scores ranging from 550 to 720, with loans generally falling between $1,000 to $35,000 for various terms between 12 to 60 months. The annual percentage rates (APRs) for these loans fluctuate between 9.95% to 36.00%, depending on factors such as the borrower’s creditworthiness and loan characteristics.

Additionally, an administration fee is usually charged upfront and can range from 1.50% to 9.99%. Customers often seek these loans for primary purposes like consolidating existing debt, covering emergency expenses, or paying for special life events and car repairs.

Analytical Methodologies Applied

In its analysis, KBRA utilized its Consumer Loan ABS Global Rating Methodology along with its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology. These systematic approaches allowed KBRA to conduct a comprehensive evaluation involving portfolio pool data, underlying asset quality, and the capital structure aspect of the ABS transaction.

Moreover, operational reviews of Avant and ongoing discussions with the company have contributed valuable insights. Following these assessments, operative agreements and relevant legal opinions will undergo careful review prior to the transaction's closing.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) stands as one of the principal credit rating agencies established to provide a wide array of ratings services. Registered with the U.S. Securities and Exchange Commission, KBRA also operates subsidiaries in Europe and the UK, contributing to their global reputation. The agency also holds various designations by financial authorities, solidifying its role as a trusted partner in financial analytics, including asset-backed securities.

Frequently Asked Questions

What is AVNT 2025-REV1?

AVNT 2025-REV1 is an unsecured consumer loan ABS transaction involving multiple classes of notes totaling $200 million.

What types of loans does Avant offer?

Avant provides unsecured personal loans and credit cards mainly to non-prime consumers, with loans designed for various purposes.

How does KBRA assess transactions like this?

KBRA employs several methodologies, including its Consumer Loan ABS and Global Structured Finance Counterparty Methodologies, to evaluate loan pools and credit quality.

What is the significance of credit enhancement in ABS?

Credit enhancement strengthens the ABS structure and serves as protection for investors against potential defaults.

How can I find out more about KBRA's ratings?

KBRA publishes detailed reports and methodologies on its website providing comprehensive information about its rating categories and criteria.

About The Author

Greetings, I'm 32-year-old author and financial specialist Evelyn Baker. My introduction into the financial industry started with an economics degree and continued with a wealth of experience in wealth management and financial consulting. My great passion over the years has been assisting people and companies in making wise, well-informed decisions to reach their financial objectives.

My goal with writing is to simplify difficult financial ideas into understandable, doable guidance. My goal in writing many books and articles is to make personal finance understandable to everyone, irrespective of their experience or background. I want to give readers the information they need to take charge of their financial futures, from investing and retirement planning to budgeting and saving.

Along with my writing, I lead webinars and workshops where I provide doable advice and methods for achieving financial success. To reach a larger audience, I also frequently contribute to financial blogs and publications. My method is always to offer doable, real-world guidance that can actually improve people's lives.

Aside from my job, I like to cook, travel, and experience other cultures. I work hard to apply my belief in the value of a balanced life to my financial counsel. My goal in working is to encourage and enable people to succeed financially so they may lead the best lives possible.

Contact Evelyn Baker privately here. Or send an email with ATTN: Evelyn Baker as the subject to contact@investorshangout.com.

About Investors Hangout

Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/

The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.