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The A1 class is broken down into three AAA-rated tranches, made up of initial exchangeable notes that can be exchanged for the exchangeable notes.
The deal continues BHG's more recent streak of securitizing loans collateralized exclusively by consumer loans. The deal is the program's sixth term 144A securitization backed by consumer loans.
Smaller and largely unrated non-investment grade entities compose the assets, but the historical managed portfolio and securitized delinquencies and losses remain low, even during recessions.
The deal comes to market amid the home equity sector's rapid expansion, with equity accumulations of more than $35 trillion and homeowner reluctance to refinance their low-rate mortgages driving the boon.
Classes A-1FCF and A-1LCF, the first-and last-cash flow tranches, will receive sequential payments, while the A-1A and A-1B certificates will be repaid on a pro rata basis.
