Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two classes of bonds issued by Oasis 2021-2 LLC (“Oasis 2021-2”), a litigation funding ABS transaction.
Oasis 2021-2 represents the fourth ABS secured by litigation funding claims to be sponsored by Oasis Intermediate Holdco, LLC (“Oasis”) and the second to include Oasis’ MedPort-branded medical lien claims (“MedPort”) . Oasis, through its operating subsidiaries, has a long history as an originator, underwriter and manager of litigation funding receivables. The company is a wholly owned subsidiary of Oasis Parent, LP, which is majority owned by Parthenon Investors IV, LP MedPort claims originate from various originators with operating histories dating back to 2003. Oasis acquired the various MedPort originators on January 5, 2021 .
Oasis 2021-2 issues two ticket classes. The previous three transactions had only one category of tickets. The ratings benefit from credit enhancement in the form of overcollateralisation and a cash reserve account. The portfolio securing the Notes has an aggregate discounted debit balance (“ADPB”) of approximately $110.3 million at the statistical closing date. The ADPB is the total discounted recoveries associated with Oasis 2021-2 portfolio litigation funding receivables, litigation loan receivables (“Litigation Receivables”), medical funding receivables and medical loan receivables (“ Medical claims”). As of the statistical closing date, litigation receivables, Medport medical receivables and Key Health medical receivables represent approximately 53%, 39% and 8% of the total funded amount and have an average lead over the settlement values of expected cases of 8.5%, 29.1% and 30.2%. %, respectively. The transaction also includes a $36 million pre-funding account that can be used to purchase additional receivables within three months of closing.
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Further information on key credit considerations, sensitivity analyzes that consider factors that may affect these credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned above.
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