Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of OneMain Financial Issuance Trust 2016-1 (“OMFIT 2016-1”), a consumer loan asset-backed securities transaction.

The collateral in the OMFIT 2016-1 deal includes approximately $555.6 million of loans, as of the December 31, 2015 statistical cut-off date. The transaction includes a three year revolving period during which additional collateral may be funded in the transaction so long as it complies with certain eligibility criteria. The preliminary ratings reflect the initial credit enhancement levels ranging from 37.45% for the Class A notes to 11.00% for the Class D notes.

OneMain Financial (“OneMain”) is an experienced originator and servicer of consumer loans and operates the largest branch based consumer finance company in the U.S. OneMain is headquartered in Baltimore, MD and operates through a decentralized branch network with centralized underwriting and servicing support. OneMain has been in the consumer finance business, through its predecessors, for over 100 years. On November 14, 2015, OneMain was acquired by Springleaf Holdings Inc. (“Springleaf”) from CitiFinancial Credit Company, a wholly-owned subsidiary of Citigroup for $4.49 billion in cash and changed its named from Springleaf Holdings to OneMain Holdings.

KBRA applied its General Rating Methodology for Asset-Backed Securities as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and OneMain’s historical annualized net loss data. KBRA also conducted an operational assessment of OneMain, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.

For complete details on the analysis, please see KBRA’s Pre-Sale Report, OneMain Issuance Trust 2016-1, which was published today at www.kbra.com.

Preliminary Ratings Assigned: OneMain Financial Issuance Trust 2016-1

Class     Rating     Expected Initial Class Principal
A     AA(sf)     $353,050,000
B     A(sf)     $60,840,000
C     BBB(sf)     $45,000,000
D     BB(sf)     $41,110,000

Representations & Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s asset-level representations, warranties and enforcement mechanisms set forth in the related offering documents when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled here.

Related Publications:

General Rating Methodology for Asset-Backed Securities

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).