Small Business Origination Loan Trust 2024-1 DAC upgrades class B and C notes

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Small Business Loan Trust Upgrade

Highlights

Fitch upgraded Small Business Origination Loan Trust 2024-1 DAC's class B to AAAsf from AAsf and class C to A+sf from Asf, affirming class A at AAAsf and class D at BBB+sf.
Cumulative gross defaults reached GBP20 million or 7.9% of the closing portfolio, with 30 to 90-day delinquencies at GBP1.7 million, equal to 1.5% of the current portfolio balance excluding defaults.
Class A notes have amortized to 35.6% of original balance after repaying GBP57.2 million, boosting credit enhancement to 51.7% for class A and 20.9% for class D.

Rating actions and transaction performance

As reported by Fitch Ratings, Small Business Origination Loan Trust 2024-1 DAC's class B notes have been upgraded to AAAsf from AAsf and class C notes to A+sf from Asf, while class A at AAAsf and class D at BBB+sf have been affirmed.

The agency says the transaction is a true-sale securitisation of a static pool of UK unsecured SME loans originated through Funding Circle Ltd's marketplace lending platform and sold by Glencar Investments 40 DAC. According to the March 2026 trustee report, cumulative gross defaults stand at GBP20 million, or 7.9% of the closing portfolio balance, while 30 to 90-day delinquencies are GBP1.7 million, equal to 1.5% of the current portfolio balance excluding defaulted loans.

Fitch says recoveries total GBP1.2 million, equivalent to 6% of cumulative gross defaults. The collateral pool also remains granular, with the 10 largest obligors accounting for 1.9% of the portfolio balance.

Credit enhancement rises as notes amortise

In September 2025, the notes switched irreversibly to sequential amortisation after the outstanding net principal amount fell below 60% of the closing level. Principal proceeds have since been used to pay down the class A notes, which now stand at 35.6% of their original balance after repaying GBP57.2 million since the previous review in March 2025.

That deleveraging has increased credit enhancement across the capital structure, ranging from 20.9% for class D to 51.7% for class A, compared with 15.9% and 38.9% respectively at last year's review. Fitch says weaker asset performance, higher delinquencies or defaults, and lower recoveries could pressure ratings, while better-than-expected loan performance and stronger excess spread could support further upgrades.

Our earlier article on Finance Ireland Auto Receivables no. 1 DAC explained Fitch’s upgrade of the deal’s class C notes alongside affirmations on the senior classes, reflecting stable collateral performance. We highlighted how low delinquencies and defaults, together with increasing credit enhancement supported by recoveries being applied to note amortisation, strengthened protection for noteholders while outlining key risks that could pressure ratings.

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