Purchasing Power Completes $175 Million Asset-Backed Securitization

Purchasing Power, LLC, a voluntary benefit fintech company that offers the leading employee purchase program through the convenience of payroll deduction, announced it closed a $175.34 million securitization. Purchasing Power® is majority owned by Flexpoint Ford, which acquired the business in 2016. Capital One Securities served as Sole Structuring Lead Manager and Sole Bookrunner on the transaction.

Kroll Bond Rating Agency (KBRA) assigned preliminary ratings to four classes of notes issued by Purchasing Power Funding 2021-A, LLC (PPF 2021-A), a consumer installment receivable ABS transaction. This transaction represents the company’s third KBRA-rated ABS securitization.

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“This success in the ABS market helps ensure Purchasing Power can continue to scale its business of providing a unique voluntary benefit to employees of large companies and offering a platform for individuals to purchase goods and services regardless of credit, with no interest or fees,” said Ron Oertell, CFO of Purchasing Power. “The offering was oversubscribed multiple times and distributed to a broad group of institutional investors, including insurance companies and money managers. Such depth and breadth of participation shows the capital market’s interest in Purchasing Power’s receivables.”

The transaction closed on April 14, 2021 and features a 24-month revolving period. PPF 2021-A comprises four tranches: $122.320 million Class A notes rated “AA” with a 1.577% yield, $20.850 million Class B notes rated “A” with a 1.930% yield, $14.360 million Class C notes rated “BBB” with a 2.548% yield, and $17.810 million Class D notes rated “BB-” with a 4.419% yield. The blended yield on the notes is 1.99% and the transaction has an advance rate of 89.0%, as a percentage of the discounted collateral value.”

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“Capital One Securities proved a great partner in this transaction, leading and facilitating an efficient deal process. We look forward to working with them again in the future,” Oertell concluded.

Purchasing Power serves employees as a voluntary benefit offered through large businesses including more than 350 Fortune 1000 companies, trade associations, unions and government agencies. Using the employee purchase program, workers have an opportunity to purchase from 40,000 of the latest brand-name consumer products and household necessities, including major appliances, electronics, furniture and automobile tires, online education services and vacation packages through payroll deduction.  They make manageable, fixed payments over 6 or 12 months with no ballooning interest, credit checks, hidden fees, or late fees associated with high-interest credit cards and other sub-prime financing options.

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