AM Best Upgrades Issue Credit Rating of Class B Notes of 321 Henderson Receivables V LLC
OLDWICK, N.J.--(BUSINESS WIRE)--Oct 29, 2021--
AM Best has upgraded the Long-Term Issue Credit Rating (Long-Term IR) to “bbb+” (Good) from “bbb” (Good) on the $4,695,000 Class B 10.00% Fixed Rate Asset Backed Notes, Series 2008-3, issued by 321 Henderson Receivables V LLC (the issuer), a special purpose Nevada limited liability company. Concurrently, AM Best has affirmed the Long-Term IRs of “aaa” (Exceptional) on the $74,646,000 Class A-1 8.00% Fixed Rate Asset Backed Notes, Series 2008-3 and the $9,389,000 Class A-2 8.00% Fixed Rate Asset Backed Notes, Series 2008-3, issued by 321 Henderson Receivables V LLC. The outlook of these Credit Ratings (ratings) is stable.
The issuer was formed for the purpose of acquiring receivables from an affiliate; conducting activities required for the maintenance and servicing of the receivables; creating trust and/or other entities for the purpose of securitizing the receivables; issuing securities related to the securitization; and organizing other activities incidental to the performance of the aforementioned items.
Proceeds from the issuance of the notes, along with contributed equity capital, were used to purchase a pool of structured settlement and annuity receivables (receivables) from the affiliate and to fund the initial reserve requirement. The initial pool of receivables consisted of 1,844 contracts totaling approximately $189.2 million in payment obligations from 107 insurance companies. Nearly all of the receivables were pursuant to a court order. A structured settlement describes an arrangement between a claimant and a defendant, which results in compensation to the claimant who has settled a claim, primarily arising from a personal injury lawsuit with the defendant. The compensation arrangement provides for a payment to be received by the claimant over time, usually in the form of an annuity payment issued by an insurance company. A settlement receivable represents the purchase of all or a portion of a claimant’s right to receive scheduled settlement payments, thereby providing liquidity to the claimant whose structured settlement no longer meets his/her particular life circumstance.
The upgrade of Class B notes reflects the improvement of its credit enhancement. The overall rating actions reflect qualitative and quantitative considerations, including default probabilities that are derived from stochastic modeling that incorporates the default probability of the insurance carriers providing the annuity payments and the assumed recovery rate on the cash flows in the event of a carrier default. The modeling of the transaction incorporates updates on the Long-Term Issuer Credit Ratings (Long-Term ICRs) of the insurance carriers; the financial data required for modeling purposes; and remaining collateral information, including the reduced payment obligations of Guaranty Association Benefits Company, a not-for-profit captive insurance company formed for making payments to the payees and certificate holders of the liquidated Executive Life Insurance Company of New York.
The ratings and the outlooks could be affected negatively if one or more of the following occurs: a reduction in the remaining scheduled payments; deterioration of the Long-Term ICR of the remaining insurance carriers; an increase in the level of the write-off activity; and a breach in ongoing surveillance or compliance benchmarks. However, the rating and the outlook of the Class B notes could be upgraded if there is significant improvement on the underlying cash flows.
These are structured finance ratings.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com:https://www.businesswire.com/news/home/20211029005504/en/
CONTACT: David Mautone
+1 908 439 2200, ext. 5765
Manager, Public Relations
+1 908 439 2200, ext. 5159
Senior Financial Analyst
+1 908 439 2200, ext. 5236
+1 908 439 2200, ext. 5644
KEYWORD: UNITED STATES NORTH AMERICA NEW JERSEY
INDUSTRY KEYWORD: BANKING PROFESSIONAL SERVICES INSURANCE FINANCE
SOURCE: AM Best
Copyright Business Wire 2021.
PUB: 10/29/2021 02:36 PM/DISC: 10/29/2021 02:36 PM