KBRA assigns preliminary ratings to Cherry Securitization Trust 2025-1
- KBRA assigns preliminary ratings to four classes of notes from Cherry Securitization Trust 2025-1.
- The ratings include credit enhancements ranging from 23.37% to 3.62% based on the note classes.
- This transaction signifies Cherry's second securitization and is pivotal for its funding strategies in 2025.
On May 8, 2025, KBRA (Kroll Bond Rating Agency) announced the preliminary ratings for four classes of notes from the Cherry Securitization Trust 2025-1. These notes are part of a consumer loan retail installment contract ABS transaction valued at $300 million and backed by approximately $324.9 million of receivables related to elective medical procedures. The ratings reflect varying levels of credit enhancement, with the Class A notes receiving the highest at 23.37% and the Class D notes at 3.62%. The transaction marks Cherry's second overall 144A ABS securitization and is the first for the year 2025. Notably, it features a 24-month revolving period, set to end by April 30, 2027, or earlier if certain conditions are met. Since its inception, the company has successfully funded about $2 billion across approximately 990,000 transactions. KBRA utilized its methodologies for analyzing consumer loans and structured finance to evaluate the collateral pool and Cherry's historical performance data. Additionally, operational reviews, along with legal opinions, will be undertaken before the finalization of the ratings and the transaction's closure.