KBRA Assigns Preliminary Ratings to Oportun Issuance Trust 2021-C

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two classes of notes issued by Oportun Issuance Trust 2021-C (“OPTN 2021-C”), a $500 million consumer loan ABS transaction with KBRA rating the Class A and Class B notes totaling $436.266 million. The transaction includes a three-year revolving period during which time additional secured and unsecured consumer installment collateral may be acquired into the securitization trust so long as they comply with certain concentration limits and eligibility criteria. The preliminary ratings reflect initial credit enhancement of 26.53% and 14.95% on the Class A and Class B notes, respectively. Credit enhancement consists of overcollateralization, subordination, excess spread and a cash reserve.

OPTN 2021-C represents the eighteenth ABS securitization collateralized by unsecured and secured consumer installment loans originated by Oportun, Inc., a wholly-owned subsidiary of Oportun Financial Corporation (“Oportun” or the “Company”), a publicly traded, California based consumer finance company listed on the NASDAQ. The Company provides financial services, including both unsecured and secured personal installment loans to borrowers who do not have a credit score or who may have a limited credit history. Oportun has been issuing unsecured consumer loans for 15 years and in April 2020 began offering secured personal installment loans (“SPL”) which are at least partially secured by an automobile title.

As of the Statistical Calculation Date, loan sizes range from $300 - $12,000, have an original term from seven to 54 months and have an annual percentage rate cap of 36%. The average original loan size to new customers is $2,442, and the average original loan size for renewal customers is $5,235. Loans typically require bi-weekly or semi-monthly payments (or monthly as required by law), which is proximate to when a customer receives wages. Approximately 50% of Oportun’s new customers do not have a FICO score.

KBRA analyzed the transaction using the Consumer Loan ABS Global Rating Methodology as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the portfolio pool data, underlying collateral pool, and capital structure. KBRA considered its operational reviews of Oportun, as well as periodic due diligence calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.

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Related Publications

• Consumer Loan ABS Global Rating Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

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 Information Disclosure Form(s) 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 Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. 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.

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