Collateralized by a pool of home improvement consumer loans, Foundation Finance Trust, series 2026-2, is preparing to sell $353.7 million in securitized bonds.
Slated to close on November 6, FFIN 2026-2 will sell the asset-backed securities (ABS) through five tranches of class A, B, C, D and E notes, all with a legal final maturity date of Aug. 15, 2053, according to analysts at Kroll Bond Rating Agency.
FFIN 2026-2's notes will repay investors sequentially, other than during a class A credit enhancement period, KBRA said. If a credit enhancement period is in place for the class A notes, when overcollateralization reaches 52.5%, then classes A through E will be repaid on a pro rata basis, the rating agency said.
The credit enhancements go on to include overcollateralization, excess spread, and a reserve fund fully funded at closing, KBRA said. Overcollateralization will initially be equal to 6.90% of the initial pool balance, while the target is either 6.90%, or the lower amount represented either by 1.00% of the initial pool balance and the notes, outstanding balance, whichever is greater.
According to KBRA, the reserve account will represent 0.50% of the initial pool balance, and excess spread is about 5.60%, the rating agency said.
By the cutoff date, September 30, the retail installment sale contracts and agreements in FFIN 2026-2's collateral pool had a FICO score of 719 on a weighted average (WA) basis. The loans had original and remaining terms of 141 and 138 months, respectively, on a WA basis, KBRA said.
KBRA assigns ratings of AAA, AA-, A-, BBB- and BB- to classes A, B, C, D and E, respectively.
ASR's database notes that Moody's Ratings assigns Aaa to the class A notes.
