Kroll Bond Rating Agency assigned preliminary ratings to three classes of notes issued by Cartiga Asset Finance Trust 2023-1, an asset-backed securitization collateralized by litigation finance receivables.
Cartiga 2023-1 represents the third ABS collateralized by litigation finance receivables to be sponsored by Cartiga Asset Management. Cartiga, formerly known as Legal Business Services, was established in 2019 through LBS’ purchase of Westbury Management Group which owned three existing litigation finance businesses: Cartiga Consumer Funding, Momentum Funding, and Ardec Capital Solutions. Cartiga Consumer, Momentum and Ardec are licensed subsidiaries of Cartiga.
Cartiga 2023-1 will issue three classes of notes. The notes benefit from credit enhancement in the form of overcollateralization and, for the Class A and B notes, a cash reserve account and subordination. The portfolio securing the $111.9 million in notes has an aggregate funded amount of approximately $103.4 million and an aggregate discounted projected receivable balance of approximately $139.8 million, including assumed prefunding, as of Jan 15 based on the illustrative discount rate of 8.51%. The transaction also features a $10 million prefunding account that is funded through the note issuance and may be used to purchase additional eligible Receivables during the three months after closing.
