Bonds
Aven Financial Debuts $304.2 Million Asset-Backed Offering Tied to HELOCs
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Aven Financial closed its first asset-backed securities offering on Oktubre 30, 2026, a $304.2 million transaction that was oversubscribed, according to the company’s announcement. The offering, AVNHT 2026-HE1 Trust, is backed by 6,786 fixed-rate, fixed-term receivables issued under the Aven Home Equity Card, the company’s home equity line of credit (HELOC) credit card product. The receivables are secured by first- or second-lien mortgages on residential properties.
The senior Class A-1A and Class A-1B notes, totaling approximately $234.5 million, received AAA ratings from S&P Global Ratings and AAA (sf) ratings from Morningstar DBRS. S&P Global Ratings assigned ratings ranging from AA to B to Classes B through F, and Morningstar DBRS rated Class B at AA (high) (sf).
“Our first 144A issuance builds on our experience in the rated debt markets and marks our first transaction rated by S&P Global Ratings,” said Aven co-founder and chief executive Sadi Khan, who said the oversubscribed offering drew investors new to the company.
The notes were offered to qualified institutional buyers under Rule 144A and Regulation S of the Securities Act of 1933. Barclays served as structuring lead manager and lead bookrunner, and Goldman Sachs (GS ) served as co-lead manager and joint bookrunner. Funds affiliated with Davidson Kempner Capital Management LP contributed assets to the transaction and purchased the Class G and XS notes at closing. WSFS served as participation agent, trustee, custodian and paying agent, among other roles. Mayer Brown represented Aven, Hunton Andrews Kurth represented the co-sponsor, and Morgan Lewis represented the bookrunners.
Capital Structure and Payment Terms
S&P Global Ratings’ presale report, published Oktubre 15, 2026, set out the preliminary capital structure, with credit enhancement provided through subordination and excess spread:
| Class | Preliminary rating | Amount ($) | Credit enhancement (%) |
|---|---|---|---|
| A-1A | AAA (sf) | 204,108,000 | 32.90 |
| A-1B | AAA (sf) | 30,418,000 | 22.90 |
| A-1 | AAA (sf) | 234,526,000 | 22.90 |
| B | AA (sf) | 11,255,000 | 19.20 |
| C | A (sf) | 14,449,000 | 14.45 |
| D | BBB (sf) | 14,753,000 | 9.60 |
| E | BB (sf) | 10,951,000 | 6.00 |
| F | B (sf) | 9,886,000 | 2.75 |
| G | Not rated | 8,365,205 | 0.00 |
The presale listed an expected closing date of Oktubre 30, 2026, a cutoff date of Setyembre 30, 2026, monthly distributions on the 25th of each month beginning Nobyembre 25, 2026, and a stated final payment date of Hulyo 2056. The aggregate note balance, including unrated classes, was $304.18 million. S&P’s presale names the sponsors as Aven Financial Inc. and ASIP Investments L.P. and describes the deal as Aven’s first transaction under its shelf.
Morningstar DBRS’s rating action, also dated Oktubre 15, 2026, assigned provisional ratings of (P) AAA (sf) to the Class A-1A, A-1B and A-1 notes and (P) AA (high) (sf) to the Class B notes, citing 22.90% credit enhancement at the AAA level and 19.20% at AA (high). DBRS disclosed that the ratings were solicited and provisional pending receipt of final documentation.
The transaction has a sequential payment structure under which principal is paid pro rata to the Class A-1A and A-1B notes and then sequentially to the Class B through G notes. S&P said credit enhancement will not be depleted as the deal seasons because principal is paid only to the most senior class outstanding. Beginning with the Nobyembre 2030 payment date, the Class A-1A, A-1B, A-1, B and C notes carry a 1.00% step-up interest rate, subject to the pool’s net weighted average coupon. The controlling holder may optionally terminate the transaction at the earlier of the Oktubre 2029 payment date or when the remaining receivable balance falls to 30% or less of the cutoff-date balance.
Collateral Pool and Origination Platform
As of the Setyembre 30, 2026 cutoff, the pool comprised 6,786 Aven Simple Loan draws from 5,767 HELOC credit card accounts, with a current balance of $304,185,205 against a maximum draw amount of $320,734,472, a utilization rate of 94.84% on S&P’s basis; Morningstar DBRS calculated a weighted average utilization rate of 96.1%. Second liens accounted for 91.32% of the pool by maximum draw balance, the weighted average original combined loan-to-value ratio was 61.47%, and weighted average seasoning was approximately nine months. DBRS stated that all loans were current and had been performing since origination.
The pool’s weighted average VantageScore 4.0 was 753, which S&P mapped to a Classic FICO of 742, or 737 after applying a five-point haircut to each score because the loans were underwritten on single-bureau pulls. S&P said AVNHT 2026-HE1 is the first transaction it has rated in which 100% of the loans were underwritten to VantageScore 4.0. The weighted average current coupon was 9.7%, the weighted average debt-to-income ratio was 33.7%, 99.4% of loans were owner-occupied, and 100% were cash-out and fixed-rate. California was the largest state concentration at 15.47% by maximum draw balance, and the top five core-based statistical areas accounted for 13.47% of the pool. All loans were exempt from the Consumer Financial Protection Bureau’s Ability-to-Repay and Qualified Mortgage rules because HELOCs are not subject to those rules.
S&P determined AAA and B loss coverage requirements of 23.40% and 3.35%, respectively, and characterized the pool as weaker than its archetypal prime pool, citing the cash-out purpose, second-lien concentration, 30-year subordinate terms and nontraditional income verification. The agency applied a weighted average documentation-type adjustment factor of 1.53x and a mortgage operational assessment adjustment of 1.050x for Aven’s fully automated underwriting.
The receivables are fixed-rate, fully amortizing Aven Simple Loans created under open-ended HELOC accounts with a five-year draw period. Only draws outstanding at the cutoff date are pledged to the trust, and no additional participation interests will be added after the cutoff. Aven locks an account once a borrower is one day delinquent, and the product offers no interest-only or balloon payment options, according to Morningstar DBRS. Coastal Community Bank originated all accounts under a program agreement with Aven and underwrites and funds the loans; Aven services the pool for a 0.50% annual fee, and Real Time Resolutions serves as backup servicer. S&P said it relied on the backup servicing construct in its analysis and that, without it, the maximum potential rating would have been AA.
Mission Global LLC performed third-party due diligence on 1,963 accounts, of which 1,781, or 30.88% by count, are in the pool. Eleven reviewed accounts received a credit grade of C and 19 received a property valuation grade of C; S&P applied a 1.005x due diligence pool-level adjustment at all rating levels.
S&P’s presale states that Aven had funded approximately $4.96 billion in HELOC originations across more than 81,000 loans and serviced a $2.98 billion portfolio as of Setyembre 30, 2026, with funding sources including warehouse financing, securitization, forward flow agreements and whole loan trades. The company said it has helped consumers save more than $400 million in interest costs as of Setyembre 2026. Aven is a financial technology company, not a bank; banking services are provided by Coastal Community Bank, Member FDIC.
Aven previously announced a $142 million Series D on Hulyo 17, 2024, co-led by Khosla Ventures and General Catalyst, and a $110 million Series E at a $2.2 billion post-money valuation on Setyembre 9, 2025, led by Khosla Ventures. The company was founded in 2019 by Khan, Collin Wikman and Murtada Shah and launched its home equity card in California in 2022.
