DailyPay, which operates a platform providing its clients access to eligible earned pay before a scheduled pay day, is coming to market to offer securitized bonds secured by a pool of on-demand pay receivables, primarily, and pre-settlement receivables.
Some $200 million in notes will be sold from the DailyPay Securitization Trust 2026-1, through four tranches of notes. The transaction has a two-year revolving period when eligible receivables can be sold into the trust, according to Morningstar DBRS.
By the pool's statistical cutoff date, up to 15% of the pooled receivables might consist of pre-settlement receivables, DBRS said. The deal is expected to close on October 7, with a legal final maturity date of Oct. 25, 2029.
Structured as a rule 144A deal, the transaction includes a reserve account balance equaling at least 0.75% of the deal's initial note balance. If, during the two-year revolving period, the amount in the reserve account is less than the specified account balance, the note paying agent will deposit an amount representing the shortfall into the reserve account.
There is an overcollateralization test, and the initial overcollateralization for the notes on the closing date will be about $12 million, about 6.00% of the initial adjusted pool balance, according to DBRS.
Classes A, B, C and D benefit from 16.21%, 13.75%, 10.26% and 6.71%, respectively.
Citigroup Global Markets, Barclays Capital and BofA Securities are initial purchasers and joint lead bookrunners, DBRS said, while KeyBanc Capital Markets, Wells Fargo Securities and Scotia Capital are co-managers on the deal, the rating agency said.
DBRA assigns ratings ranging from (P) AA (sf) on the class A notes to (P) BBB (sf) on the class D notes.
