AM Best Affirms Issue Credit Ratings of 321 Henderson Receivables V LLC

AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IRs) of “aaa” (Exceptional) on the $74,646,000 Class A-1 8.00% Fixed Rate Asset Backed Notes, Series 2008-3 and the $9,389,000 Class A-2 8.00% Fixed Rate Asset Backed Notes, Series 2008-3 as well as the Long-Term IR of “a” (Excellent) on the $4,695,000 Class B 10.00% Fixed Rate Asset Backed Notes, Series 2008-3, issued by 321 Henderson Receivables V LLC (the issuer), a special purpose Nevada limited liability company. The outlook of these Credit Ratings (ratings) is stable.

The issuer was formed for the purpose of acquiring receivables from an affiliate; conducting activities required for maintaining and servicing the receivables; creating a trust and/or other entities for the purpose of securitizing the receivables; issuing securities related to the securitization; and organizing other activities incidental to the performance of the aforementioned items.

Proceeds from the issuance of the notes, along with contributed equity capital, were used to purchase a pool of structured settlement and annuity receivables (receivables) from an affiliate and to fund the initial reserve requirement. The initial pool of receivables consisted of 1,844 contracts totaling approximately $189.2 million in payment obligations from 107 insurance companies. As of Aug. 31, 2024, the pool of receivables totaled approximately $50.1 million in payment obligations from 53 insurance companies. Nearly all the receivables were pursuant to a court order.

These rating actions reflect qualitative and quantitative considerations, including the default probabilities that are derived from stochastic modeling that incorporates updates on the Long-Term Issuer Credit Ratings (Long-Term ICRs) of the insurance carriers; the updated financial data; and remaining collateral information, including the reduced payment obligations of Guaranty Associations Benefits Company, a not-for-profit captive insurance company formed for making payments to the payees and certificate holders of the liquidated Executive Life Insurance Company of New York. The transaction’s performance, both in terms of note balance paydown and receivable collection are in line with AM Best’s modeled expectations.

The ratings and the outlooks could be affected negatively if one or more of the following occurs: a reduction in the remaining scheduled payments; deterioration of the Long-Term ICR of the remaining insurance carriers; an increase in the level of the write-off activity; and a breach in ongoing surveillance or compliance benchmarks. However, the rating and outlook of the Class B notes could be upgraded if there is significant improvement on the underlying cash flows.

These are structured finance ratings.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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