KBRA assigns preliminary ratings to four classes of notes issued by FREED ABS Trust 2022-3FP (“FREED 2022-3FP”), a $323.55 million consumer loan asset-backed securities transaction. The preliminary ratings reflect initial credit enhancement levels of 63.10% for the Class A notes, 42.25% for the Class B notes, 33.30% for the Class C notes, and 18.20% for the Class D notes. Credit enhancement consists of overcollateralization, subordination (except for the Class D notes), a reserve account funded in subsequent periods after closing, and excess spread.

This transaction represents the thirteenth overall ABS securitization collateralized by unsecured consumer loans originated through Freedom Financial Asset Management, LLC (“FFAM” or the “Company”). 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 financial solutions including installment loans, debt restructuring, home equity lines of credit (“HELOCs”), and financial education, through its four subsidiary companies (FFAM, Freedom Debt Relief, LLC (“FDR”), Lendage, LLC (“Lendage”), and bills.com) and a fund (“Freedom Consumer Credit Fund” or “FCCF”). Since 2002, two private equity firms, Vulcan Capital and Stone Point Capital, have invested in Pantheon Partners, LLC, the parent holding company of FFN.

KBRA applied its Consumer Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and FFAM’s historical static pool data. KBRA considered its operational review of Freedom, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.

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Related Publications

• Consumer Loan ABS Global Rating Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. 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.

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