First Help Financial Completes First Asset Backed Securitization Transaction

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First Help Financial completed its first ABS Transaction, receiving a 'AA' rating from KBRA. Announces 2020 Inc. 5000 ranking.

First Help Financial is a Massachusetts based auto lender.

While there are hundreds of auto lenders in the country, there is only a handful that have the ability to do a transaction of this nature.

First Help Financial, a specialty automotive finance company, issued $143.24 Million in notes backed by consumer auto loans. The issuance took place on July 22nd, 2020 and is the first securitization in the history of the company. The transaction, labeled FHF Trust 2020-1, was completed with the help of Deutsche Bank and rated by Kroll Bond Rating Agency.

The transaction received ratings of ‘AA’, ‘A’, and ‘BBB’ from Kroll with the classes being priced at 2.59%, 3.10% and 4.93% respectively. Additionally, the securitization included initial hard credit enhancement levels ranging from 30.00% to 6.50%. Credit enhancement is comprised of overcollateralization, subordination of junior note classes (except for the Class C notes), a cash reserve account and excess spread. The average gross rate on the portfolio is 17.90%, providing 11.63% excess spread.

This transaction is an important step for First Help Financial, adding another funding source to its existing loan sale program and senior asset backed line of $155 Million. By adding securitization as a funding source, FHF can continue to expand the volume and depth of its origination program. FHF will continue to service the portfolio, receiving a 3.00% servicing fee from available funds at the top of the distribution waterfall. Servicing will continue to be provided by First Help Financial.

“This is a milestone for the company,” said Pushan Sen Gupta, CEO of First Help Financial. “While there are hundreds of auto lenders in the country, there is only a handful that have the ability to do a transaction of this nature.” Sen Gupta also noted that this transaction helps future expansion by giving FHF access to a much larger investor base, including Wall Street investment firms.

First Help Financial focuses on an under served segment of the consumer auto loan market. Utilizing several years of experience in this particular niche, FHF has developed a system that identifies specific borrowers who traditional lenders typically overlook. To date, FHF has originated over $525 Million in loans to this customer segment and has been named to the Inc. 5000 in 2019 and 2020 as one of the fastest growing privately held companies in the U.S. For more information on the 2020 Inc. 5000 placement, please click here: https://www.inc.com/profile/first-help-financial

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Christopher Connor
First Help Financial
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