ThunderRoad Financial LLC is entering the securitization market for the first time, according to presale report from Morningstar. The $59.7 million transaction is expected to close today.
ThunderRoad Motorcycle Trust 2016-1, a private placement transaction under Rule 144A, is backed by prime and subprime motorcycle retail installment loans with an average original term of 74 months, according to the report.
“The primary risk in a motorcycle asset-backed transaction is that the borrowers may default,” Morningstar said in the report, and “the secondary risk is that the proceeds from the sales of motorcycles backing the defaulted receivables may be insufficient to make the required timely payment of interest and ultimate payment of principal.”
The Reno, Nev.-based lender’s portfolio nearly tripled to 5,717 loans in January, up from 1,510 loans at the same time a year prior. Year-over-year delinquencies as a percentage of the outstanding loan balance increased to 5.26% from 3.85% during the same time period.
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