KBRA Assigns Preliminary Ratings to Purchasing Power Funding 2026-A, LLC
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags
Key Terms
absfinancial
Asset-backed securities (ABS) are financial instruments that bundle many individual loans or receivables—such as car loans, credit-card balances or equipment leases—and sell slices of the bundle to investors. Like slicing a loaf of bread into pieces to share, ABS let investors buy a portion of the cash flows from many borrowers, so their credit quality, payment speed and default rates directly affect the income, risk and liquidity investors receive.
securitizationfinancial
Securitization is when a bank or company takes a bunch of loans or assets, like mortgages or car loans, and bundles them together into a single package. They then sell pieces of this package to investors, who receive regular payments from the borrowers. This process helps the original lender get money quickly and spreads the risk among many investors.
credit enhancementfinancial
Credit enhancement is a set of tools or arrangements—such as guarantees, insurance, reserve funds, or priority of payments—designed to reduce the chance lenders or bondholders lose money if a borrower defaults. Investors care because these measures make a debt issue look safer and can raise its credit rating; like a co-signer or loan insurance, credit enhancement typically lowers the yield an issuer must pay but also reduces the investor’s risk.
overcollateralizationfinancial
Overcollateralization is the practice of pledging assets worth more than the amount of debt they secure, creating a built-in safety cushion for lenders or bond investors if the underlying assets lose value. Think of it like leaving a larger-than-required security deposit: it lowers the chance investors suffer losses, can improve credit ratings, and usually means lower yields or stricter terms for borrowers because the investment is safer.
reserve accountfinancial
A reserve account is a pool of money a company or financial institution sets aside separately from everyday operating funds to cover expected or unexpected obligations—examples include loan losses, repairs, legal settlements, or planned future projects. For investors it acts like an emergency savings account for the business: sufficient, well-managed reserves reduce the chance of sudden financial strain, protect cash flow and dividends, and signal lower credit and operational risk.
esgtechnical
ESG stands for Environmental, Social, and Governance, which are key factors investors consider when evaluating how sustainable and responsible a company is. It involves assessing how a company manages its impact on the environment, treats its employees and communities, and operates transparently and ethically. Investors use ESG criteria to identify businesses that align with their values and have the potential for long-term success.
NEW YORK--(BUSINESS WIRE)--
KBRA assigns preliminary ratings to five classes of notes issued by Purchasing Power Funding 2026-A, LLC (“PPWR 2026-A”), a $225.00 million consumer installment receivable ABS transaction. PPWR 2026-A is a revolving ABS securitization with an initial securitization value of approximately $256.1 million and is collateralized by a pool of retail installment sales contracts (“Receivables”) originated by Purchasing Power, LLC (the “Company” or “Purchasing Power”).
Founded in 2001, Purchasing Power is an Atlanta, GA-based provider of an organization-sponsored payroll purchase program. On January 2, 2026, the Company was acquired for approximately $420 million by PROG Holdings, Inc. (NYSE: PRG) (“PROG”), a fintech company headquartered in Salt Lake City, UT, which specializes in alternative payment solutions for customers of subprime credit quality.
Purchasing Power partners with private sector employers (“Affiliate Clients”) and government employers (“Public Sector Clients”), collectively (“Clients”), to provide voluntary financing to their employees (“Obligors”) for the purpose of purchasing consumer goods and services. Purchasing Power does not offer loans to their Obligors. Instead, the Obligor is offered a Receivable which is repaid through payroll deductions (or payroll allotment for government Obligors) from their paychecks.
PPWR 2026-A has initial credit enhancement levels from 52.98% for the Class A notes to 13.03% for the Class E notes. Credit enhancement consists of subordination (except for the Class E notes), overcollateralization, a non-declining reserve account, and excess discount.
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 Purchasing Power, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.
To access ratings and relevant documents, click here.
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), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.
