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KBRA Assigns Preliminary Ratings to Upstart Securitization Trust 2025-2

Strategic Insights

— 1 min read

Kroll Bond Rating Agency (KBRA) has assigned preliminary ratings to four classes of notes issued by Upstart Securitization Trust 2025-2, a $294.51 million consumer loan ABS collateralized by unsecured consumer loans. This transaction represents the 46th ABS securitization collateralized by unsecured consumer loans originated through the online platform operated by Upstart Network, Inc. (Upstart), a 100% owned subsidiary of publicly traded Upstart Holdings, Inc. (NASDAQ: UPST). KBRA's analysis considered the portfolio pool data, underlying collateral pool, and capital structure, as well as operational reviews of Upstart and periodic update calls with the Company.

Key Takeaways:

  • KBRA assigned preliminary ratings to four classes of notes, with initial credit enhancement levels ranging from 58.75% for the Class A notes to 20.50% for the Class D notes.
  • Credit enhancement consists of overcollateralization, excess spread, a non-declining cash reserve account, and subordination (except for the Class D notes).
  • The transaction is the 46th ABS securitization collateralized by unsecured consumer loans originated through Upstart's online platform.
  • KBRA applied its Consumer Loan ABS Global Rating Methodology, Global Structured Finance Counterparty Methodology, and ESG Global Rating Methodology to analyze the portfolio pool data and capital structure.
  • KBRA conducted operational reviews of Upstart and held periodic update calls with the Company to evaluate its performance.
  • Operative agreements and legal opinions will be reviewed prior to closing.

Statistics:

  • Total note issuance: $294.51 million
  • Initial credit enhancement levels:

+ Class A notes: 58.75%

+ Class B notes: 45.90%

+ Class C notes: 36.20%

+ Class D notes: 20.50%

  • Number of ABS securitizations collateralized by unsecured consumer loans originated through Upstart's platform: 46
  • Total amount securitized through Upstart's platform: $[not specified]

Sources:

  • Kroll Bond Rating Agency, LLC news release (no date specified) [KBRA]
  • Upstart Holdings, Inc. (NASDAQ: UPST) [UPST]
  • Kroll Bond Rating Agency, LLC: Consumer Loan ABS Global Rating Methodology [Global Structured Finance Counterparty Methodology]
  • Kroll Bond Rating Agency, LLC: Global Structured Finance Counterparty Methodology
  • Kroll Bond Rating Agency, LLC: ESG Global Rating Methodology [ESG]

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