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KGS Closes Two Specialty Finance Securitizations Totalling $130 Million

May 11, 2015, 07:56 AM

KGS-Alpha Capital Markets, L.P. (KGS) announced the closing of two separate financings backed by structured settlement receivables in April 2015. The financing transactions were conducted with Stone Street Capital (Stone Street) and DRB Capital (DRB), respectively

Stone Street’s Inaugural Term ABS Issuance

KGS acted as sole bookrunner and structuring agent for the Stone Street Receivables Funding 2015-1 transaction, a three class senior-subordinate $80 million ABS transaction rated by DBRS, Inc.

KGS structured and syndicated the inaugural term ABS transaction, which refinanced existing and newly originated guaranteed structured settlement assets. The transaction included bonds rated AAAsf, BBBsf and BBsf at issuance by DBRS. The “double B” class is a first in the structured settlement ABS market. Stone Street’s team was led by its majority owner, the New World Group of Great Neck, NY and its CEO and President, Adam Shapiro.

The transaction introduces a new issuer into the ABS market.

DRB Revolving Purchase Facility

KGS acted as sole arranger and structuring agent for DRB in connection with an inaugural $50 million line to finance regular and Life Contingent or Non-Guaranteed Structured Settlements (LCSS).

KGS structured a three-year revolving facility and sourced a regional bank to finance DRB’s originations. The transaction marks a significant development in the space given the mortality risk associated with a portion of the facility.

The transaction provides liquidity in an emerging segment of the structured settlement space.

KGS is a New York-based integrated financial services firm focused on offering premier fixed income, residential and commercial real estate, and investment banking services to institutional clients. In investment banking, KGS develops and structures financing solutions for middle-market private companies, both in capital raises and asset-backed products. Since its founding in 2010, KGS has been committed to developing long-term relationships and delivering value-driven services. KGS has a stable capital base, with no legacy liabilities or exposures, in order to serve its institutional customers.

Stone Street Capital is a leading originator of structured settlement and lottery receivables with more than 25 years of experience. Stone Street provides upfront cash to holders of structured settlements, life contingent structured settlements, lotteries and annuities, and has originated more than $2.5 billion in transactions since its founding in 1989.

DRB Capital is a liquidity solutions business that caters to individuals and businesses with high quality but illiquid intangible assets like annuities and personal injury claims. In addition to traditional structured settlements, the company focuses on personal injury litigation funding and life-contingent flows. Backed by Blackstone, DRB is a relatively new entrant in the space and is led by former Peachtree Financial Solutions CEO Jim Terlizzi.

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