OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best Upgraded the Long Term Issue (Long Term IR) credit rating to ‘bbb +’ (good) from ‘bbb’ (good) on the Class B 10.00% Fixed Rate Asset Backed Notes of $ 4,695,000, Series 2008-3, issued by 321 Henderson Receivables V LLC (the issuer), a Nevada limited liability company. Concurrently, AM Best confirmed the long-term IRs of âaaaâ (exceptional) on the $ 74,646,000 Fixed Rate Asset Backed Notes of Class A-1, Series 2008-3 and the 9,389 $ 000 Class A-2 8.00% Fixed Rate Asset Backed Notes, Series 2008-3, issued by 321 Henderson Receivables V LLC. The outlook for these credit ratings (ratings) is stable.
The issuer was incorporated for the purpose of acquiring receivables from an affiliate; carry out the activities necessary for the maintenance and servicing of receivables; create a trust and / or other entities for the purpose of securitizing receivables; the issuance of securities linked to securitization; and the organization of other activities incidental to the execution of the aforementioned elements.
The proceeds from the issuance of the Notes, along with the contributed equity, were used to purchase a pool of structured settlement and annuity debt (receivables) from the affiliate and to fund the initial reserve requirements. The original group of receivables consisted of 1,844 contracts totaling approximately $ 189.2 million in payment obligations from 107 insurance companies. Almost all of the claims were under a court order. A structured settlement describes an arrangement between a plaintiff and a defendant, which results in compensation for the plaintiff who has settled a claim, resulting primarily from a personal injury lawsuit with the defendant. The indemnity agreement provides that a payment will be received by the claimant over time, usually in the form of an annuity payment issued by an insurance company. A settlement claim represents the purchase of all or part of a claimant’s right to receive scheduled settlement payments, thereby providing liquidity to the claimant whose structured settlement no longer matches their particular life circumstances.
The upgrade to Class B scores reflects the improvement in her credit enhancement. Global rating actions reflect qualitative and quantitative considerations, including probabilities of default which are derived from a stochastic modeling that incorporates the probability of default of the insurance companies providing the annuity payments and the assumed recovery rate on the payments. cash flow in the event of company default. Transaction modeling incorporates updates to insurers’ Long Term Issuer Credit Ratings (Long Term ICRs); financial data needed for modeling purposes; and the remaining collateral information, including the reduced payment obligations of the Guaranty Association Benefits Company, a not-for-profit captive insurance company formed to make payments to beneficiaries and certificate holders of the liquidated Executive Life Insurance Company of New York.
Ratings and outlook could be adversely affected if one or more of the following events occur: a reduction in the remaining scheduled payments; deterioration of the long-term ICR of the remaining insurers; an increase in the level of radiation activity; and a violation of continuous monitoring or compliance criteria. However, the rating and outlook of Class B notes could be upgraded if there is a significant improvement in the underlying cash flow.
These are structured financial ratings.
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