Subject: Bond/Stock Rating
KBRA Assigns Preliminary Ratings to Genesis Private Label Amortizing Trust 2020-1
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes issued by Genesis Private Label Amortizing Trust 2020-1 ("GPLAT 2020-1"), a credit card asset-backed securitization.
The impact of COVID-19 has resulted in an economic slowdown and high unemployment, which is expected to adversely impact the performance of credit card receivables, including those supporting the subject transaction. Owing to this risk, KBRA increased its base charge off rate assumptions for the subject pool in a manner that was consistent with a recent portfolio review of the sector detailed in the following report: 15 U.S. Credit Card ABS Securities on Watch Due to COVID-19 Concerns.
The collateral in the GPLAT 2020-1 deal includes approximately $195.845 million of receivables as of the June 30, 2020 statistical cutoff date. The preliminary ratings reflect the initial credit enhancement level range of 58.37% for the Class A notes to 30.75% for the Class E notes.
Genesis Financial Solutions, Inc., including its affiliates, ("Genesis" or the "Company") is a privately held consumer finance company that was established in 2001 and currently issues both general purpose and private label retail credit cards. The Company was originally formed to originate, acquire and service consumer loans, and entered the private label and general-purpose credit card business in 2011 and 2013, respectively.
KBRA applied its Global Credit Card ABS Rating Methodology and Global Structured Finance Counterparty Methodology as part of its analysis of the transaction's underlying collateral pool and the proposed capital structure. KBRA also conducted an operational assessment of Genesis, 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.
Click here to view the report. To access ratings and relevant documents, click here.
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Disclosures
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the U.S. Information Disclosure Form located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
About KBRA
KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA.
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