[slide 1]
QRF 2022-1 Structural Overview
$500,000,000 Insurance Premium Finance ABS — Series 2022-1
Issuer: Quorum Receivables Funding 2022-1 LLC
Sponsor: Quorum Insurance Holdings Corp. (NYSE: QIHC)
Prepared by Calderwood & Harkness LLP — Matter No. 1025-00007
Date: July 25, 2022
[slide 2]
Deal Snapshot
Total issuance: $500,000,000, offered under Rule 144A / Regulation S
Underlying asset: insurance premium finance receivables originated by Quorum Premium Finance LLC (QPF)
Revolving period: 24 months from closing; amortization period: 12 months thereafter
Legal final maturity: 42 months from closing
Governing law: New York; SPVs organized in Delaware
[slide 3]
Corporate & SPV Structure
Quorum Insurance Holdings Corp. (Delaware corp.; Sponsor/Parent)
→ 100% owner of Quorum Premium Finance LLC (Originator/Seller/Servicer)
→ 100% owner of Quorum Receivables Holding LLC (QRH — intermediate SPV/Depositor; ind. mgr: Eleanor M. Vasquez)
→ 100% owner of Quorum Receivables Funding 2022-1 LLC (Issuer; ind. mgr: Timothy R. Callan)
Registered agent for both SPVs: Ashgrove Services Inc., 28 Liberty Street, New York, NY 10005
[slide 4]
Receivables Origination and True Sale Flow
Step 1: QPF originates insurance premium finance loans (all 50 states; WA APR 7.85%; WA term 9.2 months)
Step 2: True sale QPF (Seller) → QRH (Purchaser) under the Receivables Sale Agreement
Step 3: True sale QRH (Transferor) → QRF 2022-1 (Transferee) under the Receivables Transfer Agreement
Step 4: QRF 2022-1 grants first-priority security interest to Calvoneth Trust Company, N.A. as Indenture Trustee
UCC-1 financing statements filed at each level with Delaware SOS
[slide 5]
Initial Receivables Pool — Cut-Off June 30, 2022
Initial pool balance: $612,000,000 across ~82,400 loans (avg. loan ~$7,427)
WA APR 7.85%; WA original term 9.2 months; WA remaining term 5.7 months
Historical net loss rate (2019–2021 avg.): 0.42%; 60+ day delinquency at cut-off: 0.87%
Largest single obligor: 0.38% ($2,325,600); top 10 obligors: 2.14% ($13,096,800)
Top 3 states: Texas 14.2%, California 11.8%, Florida 9.6% (aggregate 35.6%)
[slide 6]
Note Issuance and Capital Structure
Class A: $375,000,000 (75.0%) — AAA(cr)/Aaa(p) — SOFR + 125 bps — 25.0% CE
Class B: $75,000,000 (15.0%) — A(cr)/A1(p) — SOFR + 210 bps — 10.0% CE
Class C: $35,000,000 (7.0%) — BBB(cr)/Baa2(p) — SOFR + 375 bps — 3.0% CE
Overcollateralization / Retained Interest: $15,000,000 (3.0%) — unrated
Preliminary CUSIPs: 74892TAA3 (A), 74892TAB1 (B), 74892TAC9 (C)
[slide 7]
Roles of Transaction Parties
Structuring Agent / Lead Bookrunner / Sole Placement Agent: Ridgeline Capital Markets LLC
Indenture Trustee / Paying / Calculation Agent / Sec. Intermediary / Custodian: Calvoneth Trust Company, N.A.
Servicer: QPF (1.00% p.a. servicing fee on outstanding pool balance)
Back-Up Servicer & Liquidity Provider: Northvane Bank, N.A. — $25M liquidity facility
Administrator: QIH; Verification Agent: Veristead Analytics LLC; Auditor: Meridian Ledger LLP
[slide 8]
Collection Accounts and Control Structure
Obligors remit monthly premium finance payments to a QPF-controlled lockbox
Collections swept daily to the Collection Account held at Calvoneth Trust as Securities Intermediary
Account Control Agreement grants Trustee exclusive control post-notice
Reserve Account and Liquidity Reserve Account funded on closing per Indenture requirements
Payment Account funds distributions to noteholders on each Payment Date
[slide 9]
Sequential Payment Waterfall
1. Trustee fees and expenses ($35,000/yr + $5,000 per payment date)
2. Servicing fee (1.00% p.a., ~$510,000/month at initial pool) and back-up servicer fee ($12,500/quarter)
3. Class A interest → 4. Class B interest → 5. Class C interest
6. Class A principal → 7. Class B principal → 8. Class C principal (each until paid in full)
9. Replenish OC to target → 10. Residual to Issuer (retained by sponsor)
[slide 10]
Eligible Receivables Criteria
Originated by QPF in the ordinary course; USD-denominated
Secured by unearned premium refund rights from a U.S. commercial policyholder
Original term ≤ 12 months; not more than 60 days past due
Compliant with all applicable state usury and premium finance licensing laws
Concentration limits: single obligor ≤ 0.75%; single state ≤ 20%; single carrier ≤ 15%
[slide 11]
Early Amortization Triggers
3-month average net loss rate exceeds 2.00%
60+ day delinquency rate exceeds 3.50%
Available funds cap deficit for 2 consecutive periods
Servicer default or servicer rating downgrade below BB(cr)/Ba2(p)
Pool balance falls below minimum required ($450,000,000 during revolving period)
[slide 12]
Liquidity Facility — Northvane Bank, N.A.
Facility size: $25,000,000 provided by Northvane Bank, N.A.
Commitment fee: 0.25% p.a. on undrawn amount ($62,500/yr)
Drawn rate: SOFR + 150 bps; repayment at super-senior priority in the waterfall
Purpose: bridge timing mismatches between collections and note interest payments
Cannot be used to cover credit losses on the receivables
[slide 13]
Security Interest and Collateral Grant
QRF 2022-1 grants Calvoneth Trust a first-priority security interest in the Trust Estate
Collateral: all receivables, related security, collections, accounts, contract rights, general intangibles
Perfection: UCC-1 financing statements filed with Delaware SOS at each transfer level
Custody: receivable files held by Calvoneth Trust as Custodian
Trustee holds collateral for the ratable benefit of all noteholders
[slide 14]
Rating Agency Coverage
Brindoval Ratings Inc. — Engagement No. CR-SF-2022-08812; Lead: Andrew Petrosian
Pinnacle Rating Services LLC — Engagement No. PRS-2022-ABS-3347; Lead: Monica Sung
Preliminary ratings: Class A AAA(cr)/Aaa(p); Class B A(cr)/A1(p); Class C BBB(cr)/Baa2(p)
Rating agency presentations delivered August 8, 2022
Ongoing surveillance post-closing under each agency's structured finance criteria
[slide 15]
Key Fees and Economics
Placement fees: Class A $1,125,000 + Class B $337,500 + Class C $210,000 = $1,672,500 total
Servicing fee: 1.00% p.a. of pool balance (~$510,000/month at initial pool)
Back-Up Servicer fee: $50,000/yr ($12,500/quarter)
Trustee fee: $35,000/yr + $5,000 per payment date
Liquidity: 0.25% p.a. commitment on undrawn ($62,500/yr); drawn rate SOFR + 150 bps
[slide 16]
Document Architecture Map
Indenture (QRF 2022-1 ↔ Calvoneth Trust) — note terms, waterfall, events of default
Receivables Sale Agreement (QPF → QRH) and Receivables Transfer Agreement (QRH → QRF 2022-1)
Servicing Agreement and Back-Up Servicing Agreement — collection and standby operations
Note Purchase Agreement (Issuer, Sponsor, Ridgeline) — offering terms and reps
Ancillary: Administration, Account Control, Custodian, Pledge, Liquidity Facility, Performance Guaranty (QIH)
[slide 17]
Timeline to Closing
July 25, 2022: Structure finalized; SPV formation authorized (this deck)
August 3, 2022: QRF 2022-1 and QRH formed in Delaware
August 8, 2022: Rating agency presentations
September 2022: Core document drafts and rating agency Q&A
October 2022: Investor roadshow; targeted closing subject to market conditions
[slide 18]
Appendix — Key Contacts
QIH: Marcus Devereaux (CEO), Priya Raghavan (CFO), Nolan Whitford (GC), Sandra Ling-Hwang (Treasurer)
Calderwood & Harkness: Douglas Carmichael, Francesca Morano, Yuki Nakamura, Carlos Espinoza, Sylvia Hartwell
| Ridgeline: Julian Weatherstone, Rebecca Tran | Calloway & Brandt: Harrison Collier, Megan O'Shaughnessy | |
| Calvoneth Trust: Gerald K. Fontaine | Ashfield & Greer: Vivian Sato | Northvane: Diane Coletti |
| Fortbridge: Timothy R. Callan, Eleanor M. Vasquez | Brindoval: Andrew Petrosian | Pinnacle: Monica Sung |