KBRA assigns preliminary ratings to four classes of notes issued by Reach ABS Trust 2023-1 (“REACH 2023-1”), an unsecured consumer loan ABS transaction.

This transaction represents Reach Financial, LLC’s (“Reach”, the “Servicer” or the “Company”) first rated securitization of 2023 and sixth overall. REACH 2023-1 will issue four classes of notes totaling $225.32 million, collateralized by a trust certificate backed by unsecured consumer loans. Credit enhancement consists of excess spread, overcollateralization, subordination (in the case of the Class A, Class B and Class C Notes) and a reserve account funded at closing.

Reach is an independent consumer finance company that was founded in New York, NY in 2015. Reach shares common ownership with National Debt Relief, LLC (“NDR”); owners of NDR own the majority of Reach, with the remaining equity interest distributed among Reach’s management team and key employees. Reach is the only lending platform used by NDR. The Company, previously known as Liberty Lending LLC, rebranded itself as Reach Financial, LLC in May 2022. From 2018 to May 31, 2023, the Company has been profitable. As of May 31, 2023, Reach had $576 million in loan receivables outstanding in its managed portfolio.

KBRA applied its Consumer Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the portfolio pool data, underlying collateral pool and capital structure. KBRA considered its operational reviews of Reach, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.

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Related Publications

• Consumer Loan Global ABS Rating Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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