Key Takeaways

• KBRA assigns preliminary ratings to four classes of notes from Stream Innovations 2025-1 Issuer Trust, backed by consumer loans for home improvements.
• The total issuance is $242.89 million, with credit enhancement levels ranging from 24.10% to 3.20% across classes.
• Stream Innovations, founded in 2020, finances home improvement projects in partnership with Power Home Remodeling Group.

Overview of STRE 2025-1 Issuer Trust Ratings

KBRA has assigned preliminary ratings to four classes of notes issued by Stream Innovations 2025-1 Issuer Trust (STRE 2025-1), an asset-backed securitization (ABS) collateralized by consumer loans utilized for home improvement projects. The credit enhancement levels for the notes range from 24.10% for Class A to 3.20% for Class D. This enhancement is supported by various factors such as overcollateralization, the subordination of lower-rated note classes (excluding Class D), a cash reserve account funded at closing, and excess spread.

STRE 2025-1 represents Stream Innovations Inc.’s third ABS securitization. The notes will total $242.89 million, backed by approximately $199.63 million in receivables and an expects balance of $249.63 million after a two-month prefunding period. Established in 2020 and headquartered in Conshohocken, Pennsylvania, Stream focuses on financing customers of Power Home Remodeling Group, LLC (“Power Home”). The company is owned by several stakeholders of Power Home, including its COO and Stream’s CEO.

Power Home, founded in 1992 and based in Chester, Pennsylvania, is dedicated to residential energy efficiency through home remodeling. The company operates 23 offices across the United States and has completed over 1 million projects, employing over 4,300 people in 27 states. Their primary services include the installation of windows, siding, insulation, doors, and roofs.

In assessing the collateral and rating, KBRA applied its Consumer Loan ABS Global Rating Methodology alongside its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology. The analysis involved reviewing static pool data and evaluating cash flow stress scenarios. KBRA also conducted an operational review of Stream Innovations, supplemented by business updates from the company. Prior to closing, operative agreements and legal opinions will undergo a thorough review.

The full rating report contains key credit considerations and sensitivity analyses which outline factors that might influence upgrades or downgrades. ESG factors play a significant role in these evaluations.

For additional information on the rating categories and methodologies, users are directed to the pertinent sections in the full disclosure report. Kroll Bond Rating Agency, LLC (KBRA) is a registered credit rating agency recognized in multiple jurisdictions, with expertise in asset-backed securities, among other financial instruments.

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