The Company has strong and growing merchant relationships formed over 30 years and has nearly doubled its annual loan originations since Blackstone first invested in 2018, with originations expected to reach $2 billion in 2021. Blackstone would also maintain a minority stake in the Company.Īqua Finance is a Wisconsin-based specialist lending platform that originates and services consumer loans, primarily for home improvement and water treatment. Under the terms of the transaction, Apollo will manage the investment on behalf of Athene. 29, 2021 (GLOBE NEWSWIRE) - Athene (NYSE: ATH) and Apollo (NYSE: APO) today announced that Athene has agreed to acquire a controlling stake in Aqua Finance (“Aqua” or the “Company”), a fast-growing consumer lending platform, from funds managed by Blackstone Tactical Opportunities (“Blackstone”) at a valuation of approximately $1 billion. Specialist Platform on Track to Originate $2 Billion of Loans in 2021 All of the notes have a legal final maturity of July 2046.Blackstone to Maintain Minority Investment in Aqua Finance Moody’s expects to assign an ‘A3’ rating to the $599.8 million class A notes. While AFI offers financing on a promotional basis, which can also impact payment on underlying loans, that potential risk is mitigated by the fact that 83% of receivables in the trust either do not have promotional periods, or those periods have already ended. But a backup servicing agreement with Vervent mitigates that potential risk. One credit challenge is that AFI, the originator and servicer, has a weak credit profile relative to other ABS sponsors. The initial collateral pool has a weighted average (WA) original term of 145 months, or just over 12 years. Further, only 0.1% of borrowers in the pool had a FICO score of less than 500, according to Moody’s.īorrowers in AQFIT 2021-A have a weighted average (WA) FICO score of 711, Moody’s said. will have the option to sell additional loans into the trust during a period of up to six months after closing, no loans for borrowers with a FICO score of less than 600 will be added during the prefunding period. The other mitigation is a recovery ratio trigger, which increases the over-collateralization target from 2% to 100%. This increases the average life of the senior notes and exposing the notes to additional credit risk.Ī cumulative loss trigger that switches the structure back to sequential pay mitigates the risk.
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The capital structure includes a feature that stipulates if the class A enhancement reaches 57.7%, the transaction becomes a pro rata pay structure. KeyBanc Capital Markets, Credit Suisse Securities and Goldman Sachs & Co., LLC are acting as initial note purchasers on the transaction. In previous transactions, the collateral pools had concentrations of no more than 5% of marine/RV loans.
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The trust has a collateral pool comprised of home improvement installment loans, plus up to 25% marine or RV loans, according to Moody’s Investors Service. The deal will significantly raise the percentage of loans on marine or recreational vehicles for an AQFIT transaction. In its fourth asset-backed securities transaction, Aqua Finance Inc., is planning to issue about $775 million in notes through the Aqua Finance Trust 2021-A trust, or AQFIT 2021-A.
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