KBRA Assigns Preliminary Ratings for Hana Financial 2019-1 Pass-Through Trust

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings on eight
class of notes and four class of certificates issued by Hana Financial
2019-1 Pass-Through Trust. Hana Financial SPV I, LLC will sell four
classes of Series 2019-1 variable funding notes, Class A1 Notes, Class
B1 Notes, Class C1 Notes, and Class D1 Notes (“VFN”), and four classes
of term notes, Class A2 Notes, Class B2 Notes, Class C2 Notes and Class
D2 Notes (“Term Notes”). The four classes of Term Notes will be
transferred to Hana Financial 2019-1 Pass-Through Trust (“Pass-Through
Trust”). The Pass-Through Trust will sell four classes of term
certificates, Class A2 Certificates, Class B2 Certificates, Class C2
Certificates and Class D2 Certificates (“Term Certs”) to the initial
purchaser. Initially the Issuer is expecting to sell $30 million VFN and
$70 million of term certificates totaling $100 million.

The securities will be secured by a revolving pool of receivables
consisting of (i) accounts receivable, (ii) inventory, or (iii)
inventory in transit and purchase order financing. The transaction
features a revolving period (the “Revolving Period”), which will end on
the earlier of (i) the payment date occurring in the month that is 36
months after the initial closing date, and (ii) the date on which an
Early Amortization Event occurs. During the Revolving Period, principal
is only paid to the securities if there is a borrowing base deficiency,
or to pay down the VFN, otherwise HCFI will transfer additional
receivables to the Borrower, who will purchase such additional
receivables so long as all conditions set forth in the transaction
documents are met. Once the Revolving Period is complete or there is an
early amortization event, all remaining funds after payment of advances,
fees and interest will pay down the securities sequentially.

Credit enhancement for the securities include overcollateralization, an
interest reserve account, and subordination for the more senior
securities. The Class A securities benefit from 10%
overcollateralization and 22% subordination, the Class B securities
benefit from 10% overcollateralization and 15% subordination, the Class
C securities benefit from 10% overcollateralization and 5% subordination
and the Class D securities benefit from 10% overcollateralization. The
structure also includes a borrowing base deficiency test where the
Borrower will have three business days to either pledge additional
receivables or deposit cash into the collection account, or an early
amortization event will occur.

The preliminary ratings are based on information known to KBRA at the
time of this publication. Information received subsequent to this
release could result in the assignment of final ratings that differ from
the preliminary ratings.

To access ratings, reports and disclosures, click here.

Related Publications: (available at www.kbra.com)

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. 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, and
is a certified Credit Rating Agency (CRA) by the European Securities and
Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.

Contacts

Analytical:
John Lampasona,
Director
(646) 731-2318
jlampasona@kbra.com

Lenny Giltman, Senior Managing Director
(646) 731-2378
lgiltman@kbra.com

Adam DeJong, Associate
(646) 731-2476
adejong@kbra.com