KBRA Assigns Preliminary Ratings to FREED ABS Trust 2019-2

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by FREED ABS Trust 2019-2 (“FREED 2019-2”). This is a $524.12 million consumer loan ABS transaction that is expected to close on October 17, 2019.

This transaction represents the fourth overall and the first KBRA rated ABS securitization collateralized by unsecured consumer loans originated through Freedom Financial Asset Management (“FFAM”). The proceeds from the sale of the notes will be used to purchase the loans and related rights from FREED ABS Master Depositor Trust (the “Depositor”), who purchased the loans from the Loan Sellers, to fund the reserve account and to pay transaction expenses. The Depositor will in turn sell the loans to the Issuer.

Freedom Financial Network (“FFN”), the parent company to FFAM, is a San Mateo, CA based company with operations in Tempe, AZ. FFN was founded in 2002 and offers consumer debt settlement services such as: consumer education, installment loans, and debt restructuring, through its three subsidiary companies (“Freedom Debt Relief, LLC (“FDR”), FFAM, and bills.com) and a fund (“Freedom Consumer Credit Fund” or “FCCF”). FFAM offers FreedomPlus (“F+”) loans and ConsolidationPlus (“C+”) loans, both of which are fixed rate, fully amortizing unsecured consumer loans. The primary purpose of the F+ loans is debt consolidation, while the primary purpose of C+ loans is debt settlement. All of the loans in FREED 2019-2 were originated by Cross River Bank a New Jersey state-chartered commercial bank insured by the Federal Deposit Insurance Corporation (“FDIC”).

The transaction is a sequential pay structure that has initial credit enhancement levels of 42.50% for the Class A Notes, 27.25% for the Class B Notes, and 13.00% for the Class C Notes. Credit enhancement consists of excess spread, overcollateralization, subordination (in the case of the Class A and Class B Notes) and a reserve account funded at closing and subsequent periods.

KBRA applied its Global Consumer Loan ABS Rating Methodology and Global Structured Finance Counterparty Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and FFAM’s historical gross loss data. KBRA also conducted an operational assessment of FFAM, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.

To access ratings, reports and disclosures, click here.

Preliminary Ratings Assigned: FREED ABS Trust 2019-2


Preliminary Rating

Principal Balance


A+ (sf)



BBB (sf)



BB (sf)


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.



Alla Mikhalevsky, CFA, Director

(646) 731-3356

[email protected]

Brendan Carter, Associate Director

(646) 731-3315

[email protected]

Eric Neglia, Managing Director

(646) 731-2456

[email protected]

Michael Pettigrew, Analyst

(646) 731-1208

[email protected]

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