Purchasing Power® Completes $175 Million Asset-Backed Securitization

Rhea-AI Summary

Purchasing Power, LLC, a fintech company specializing in voluntary benefits, has successfully closed a $175.34 million asset-backed securitization. This financing, completed on April 14, 2021, received preliminary ratings from Kroll Bond Rating Agency for four classes of notes. The offering was significantly oversubscribed, indicating strong market interest. Notably, the transaction features a 24-month revolving period and a blended yield of 1.99%, with an advance rate of 89.0% of the collateral value, helping to support Purchasing Power’s innovative employee purchase program.

Positive

• Successfully closed $175.34 million securitization, indicating strong capital market interest.
• Transaction was oversubscribed multiple times, reflecting confidence from institutional investors.
• Blended yield of 1.99% and an advance rate of 89.0% enhance financial stability.

Negative

• None.

ATLANTA, April 20, 2021 /PRNewswire/ -- Purchasing Power, LLC, a voluntary benefit fintech company that offers the leading employee purchase program through the convenience of payroll deduction, announced today it closed a $175.34 million securitization. Purchasing Power^® is majority owned by Flexpoint Ford, which acquired the business in 2016. Capital One Securities served as Sole Structuring Lead Manager and Sole Bookrunner on the transaction.

Purchasing Power, LLC announced today it closed a $175.34 million securitization through Capital One Securities.

Kroll Bond Rating Agency (KBRA) assigned preliminary ratings to four classes of notes issued by Purchasing Power Funding 2021-A, LLC (PPF 2021-A), a consumer installment receivable ABS transaction. This transaction represents the company's third KBRA-rated ABS securitization.

"This success in the ABS market helps ensure Purchasing Power can continue to scale its business of providing a unique voluntary benefit to employees of large companies and offering a platform for individuals to purchase goods and services regardless of credit, with no interest or fees," said Ron Oertell, CFO of Purchasing Power. "The offering was oversubscribed multiple times and distributed to a broad group of institutional investors, including insurance companies and money managers. Such depth and breadth of participation shows the capital market's interest in Purchasing Power's receivables."

The transaction closed on April 14, 2021 and features a 24-month revolving period. PPF 2021-A comprises four tranches: $122.320 million Class A notes rated "AA" with a 1.577% yield, $20.850 million Class B notes rated "A" with a 1.930% yield, $14.360 million Class C notes rated "BBB" with a 2.548% yield, and $17.810 million Class D notes rated "BB-" with a 4.419% yield. The blended yield on the notes is 1.99% and the transaction has an advance rate of 89.0%, as a percentage of the discounted collateral value."

"Capital One Securities proved a great partner in this transaction, leading and facilitating an efficient deal process. We look forward to working with them again in the future," Oertell concluded.

Purchasing Power serves employees as a voluntary benefit offered through large businesses including more than 350 Fortune 1000 companies, trade associations, unions and government agencies. Using the employee purchase program, workers have an opportunity to purchase from 40,000 of the latest brand-name consumer products and household necessities, including major appliances, electronics, furniture and automobile tires, online education services and vacation packages through payroll deduction.  They make manageable, fixed payments over 6 or 12 months with no ballooning interest, credit checks, hidden fees, or late fees associated with high-interest credit cards and other sub-prime financing options.

About Purchasing Power, LLC
Purchasing Power, LLC, is an Atlanta-based voluntary benefit company celebrating 20 years as the leading employee purchase program for consumer products and services through payroll deduction. Helping employees achieve financial flexibility, Purchasing Power is available to millions of people through large companies including Fortune 500s, associations and government agencies. Purchasing Power is a Flexpoint Ford, LLC company. For more information, visit https://corp.purchasingpower.com/.

About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $305.4 billion in deposits and $421.6 billion in total assets as of December 31, 2020. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Purchasing Power is a registered trademark of Purchasing Power, LLC.
©2021 Purchasing Power, LLC. All rights reserved.

Media Contact:
Joe Swaney, 404.609.5630
jswaney@purchasingpower.com  

Juliann Kaiser, 770.643.0615
jkaiser@kaisermarketinggroup.com  

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SOURCE Purchasing Power, LLC

FAQ

What is the significance of Purchasing Power's $175 million securitization on April 14, 2021?

The $175 million securitization enhances Purchasing Power's financial capacity, allowing it to scale its employee purchase program.

What ratings did the Kroll Bond Rating Agency assign to the notes in the securitization?

The Kroll Bond Rating Agency assigned ratings across four classes, including AA for Class A notes.

Who managed the securitization transaction for Purchasing Power?

Capital One Securities served as the Sole Structuring Lead Manager and Sole Bookrunner for the transaction.

How does the asset-backed securitization benefit Purchasing Power's business model?

The securitization facilitates the provision of voluntary benefits to employees, allowing purchases through payroll deduction without credit checks.

What is the advance rate achieved in the securitization by Purchasing Power?

The transaction achieved an advance rate of 89.0% based on the discounted collateral value.