Mission Lane Credit Card Master Trust returns to raise $200 million
Following on from its securitization last year, the Mission Lane Credit Card Master Trust, Series 2022-A, will issue $200 million in asset-backed securities (ABS).
A higher average receivables balance, annual collateral percentage rate, and lower weighted average FICO score will set the agreement apart from its predecessor.
Mission Lane, founded in 2018, offers financial products to traditionally underserved customers struggling to build or rebuild their credit, according to a pre-sale report from ratings agency Kroll Bond. The collateral for this current agreement consists of 2.1 million accounts, including those that have been closed or delisted.
The transaction, known at MLANE 2022-A, appears to be only the second recorded in the program. Mission Lane will issue the notes through three classes. KBRA Plans to Assign “A” Ratings to $156.5 Million Class A Notes; “BBB” to Class B notes of $23.9 million; and “BB” to the $19.7 million C Notes.
Collateral accounts for MLANE, 2022-A, have an APR of 28.3%, an average balance of $650, and a weighted average (WA) FICO score of 618. This compares to an APR of 27.6% , an average receivables balance of $512, and a WA FICO score of 623 for MLANE 2021-A.
In another change from the previous agreement, MLANE’s 2022-A guarantee includes loans issued through the company’s pre-qualification channel, which it launched in the fourth quarter of 2021. This pre-qualification channel qualification allows a potential customer to apply directly for one of the company’s financial products. through the company’s website.
As for the securities resulting from the current operation, they benefit from sufficient levels of credit enhancement. Initially, MLANE 2022-A has a 0.0% reserve account and will be funded up to a target of the transaction collateral amount if the three-month average excess spread falls below certain thresholds .
If the three-month average excess spread is less than or equal to 4.0%, the reserve target will be 1%; if the excess spread is less than or equal to 3.0%, the target reserve will be 2.0%; and if the excess spread is less than or equal to 2.5%, the reserve target will be 3.0%.