KBRA Assigns Preliminary Ratings to Mulligan Asset Securitization LLC, Series 2023-1 Notes

KBRA assigns preliminary ratings to four classes of notes issued by Mulligan Asset Securitization LLC, Series 2023-1 (“Mulligan 2023-1”), a small business loan ABS transaction. Mulligan Asset Securitization LLC (the “Issuer”) will issue four classes of Series 2023-1 Notes, totaling $100 million. This ABS transaction is the inaugural for the Company.

The Notes are “expandable” term notes such that at any time during the revolving period the Issuer may periodically issue additional Notes, up to a maximum amount of $500 million, as long as certain conditions are met, including receipt of Rating Agency Confirmation.

This transaction is secured by a revolving portfolio of receivables (“Receivables”) consisting of participation interests related to Business Loans (“Business Loans”) with fixed terms and rates made to Merchants.

The transaction features a revolving period (the “Revolving Period”), which will end on the earlier of (i) prior to the close of business on January 31, 2026, approximately 36 months after the initial closing date and (ii) the date on which a Rapid Amortization Event has occurred. During the Revolving Period, the Seller will transfer additional Receivables to the Issuer, who will purchase such additional Receivables so long as (a) the Issuer and the Receivables satisfy all conditions set forth in the transaction documents and (b) a Rapid Amortization Event has not occurred and is not continuing. In addition to the Partial Call Option, the Issuer may elect to redeem the Series 2023-1 Notes in whole or in part on any payment date on or after the payment date in January 2025.

Credit enhancement will consist of subordination, excess spread, an excess funding account, and a reserve account, which will initially be funded in an amount equal to 0.50% of the aggregate balance of the Series 2023-1 Notes.

KBRA applied its Global General Rating Methodology for Asset-Backed Securities as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the transaction’s underlying collateral pool and the proposed capital structure. KBRA considered its operational review of National Funding, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.

To access ratings and relevant documents, click here.

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Related Publications

• General Global Rating Methodology for Asset-Backed Securities
• 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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